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EUR / USD. April 19th. COT report. Accelerated inflation in the EU did not help bull traders


EUR / USD – 1H. Good afternoon, dear traders! During the last trading day, the EUR / USD pair completed a new rebound from the correction level of 100.0% – 1.1989, a reversal in favor of the American currency and began a new process of falling in the direction of the Fibo level of 76.4% – 1.1922. Only the closing of the pair rate above the 100.0% level will work in favor of the resumption of growth. The key event of last Friday was undoubtedly the report on inflation in the European Union. Let me remind you that both central banks, the Fed and the ECB, are striving to accelerate inflation to 2.0% y / y or higher. However, until recently, none of them managed to achieve this. Only by the end of March in the US inflation accelerated to 2.6%, which traders perceived negatively as dollar sales. It became known on Friday that inflation in the EU also accelerated slightly, but much weaker than the American one – from only 0.9% y / y to 1.3% y / y. However, at the same time, core inflation, that is, the indicator excluding changes in food and fuel prices, slowed down from 1.1% yoy to 0.9% yoy. That is, by and large, the growth of the main indicator was caused precisely by the most volatile food and fuel products. Thus, it is not worth talking about the acceleration of general inflation right now. Since prices in March could have increased, for example, for oil or for gasoline, but this does not mean that all prices for all goods were growing. But this is exactly the effect the ECB wants to achieve. In general, it is still too early for Europe to chase America. First you need to solve the problems with coronavirus and vaccinations. Let me remind you that in the United States, vaccination is proceeding at a high rate, which affects the mood of the Americans themselves, who begin to feel more relaxed and start spending money, while the economy, in the meantime, is recovering. This is not the case in the European Union, and therefore inflation is not growing. In many countries, the third wave of the pandemic has begun. EUR / USD – 4H. On the 4-hour chart, the bearish divergence at the MACD indicator allowed the pair to begin the process of falling, but the bullish divergence formed a few hours later again allows us to count on growth. Closing the pair quotes above the level of 161.8% – 1.2027 will increase the likelihood of further growth in the direction of the next level of 1.2223. Now I suggest focusing on the level of 1.1989 on the hourly chart. EUR / USD – Daily. On the daily chart, the quotes of the EUR / USD pair have fixed above the correction level of 261.8% – 1.1822. Thus, the further fall of the pair is canceled for the time being, and instead of it, growth can be continued in the direction of the Fib level of 323.6% – 1.2080. The pullback of quotes from the trend line will allow counting on a new reversal in favor of the US currency and a slight fall towards the level of 261.8% .EUR / USD – Weekly On the weekly chart, the EUR / USD pair has completed the consolidation above the “narrowing triangle”, which preserves the prospects for further growth of the pair in the long term. News review: On April 16, only the inflation report was released in the European Union, and in the US – the consumer sentiment index from the University of Michigan, which also did not have much influence on the mood of traders. News calendar for the United States and the European Union: On April 19 in the European Union and the United States, the calendars of economic events are almost completely empty. Thus, there will be no information background today. COT report (Commitments of traders): Last Friday, another COT report was released, which turned out to be quite neutral. During the reporting week, non-commercial traders opened 2,260 Long contracts and closed 2,258 Short contracts. Thus, the mood of speculators has become a bit more bullish again. Considering that the pair is growing on the two lowest charts, everything is logical. Moreover, in general, speculators also retain a bullish mood, since the number of Long contracts concentrated on their hands still exceeds the number of Short contracts. Not as much as before, but still exceeds. Forecast for EUR / USD and recommendations for traders: I recommend selling the pair if the rebound from the level of 161.8% – 1.2027 on the 4-hour chart with targets at 1.1922 and 1.1881 is fulfilled. I recommend buying the pair when closing above 1.1989 on the hourly chart with targets at 1.2027 and 1.2067. TERMS: “Non-commercial” – major market players: banks, hedge funds, investment funds, private, large investors. “Commercial” – commercial enterprises, firms, banks, corporations, companies that buy currency not to obtain speculative profit, but to ensure current activities or export-import operations. “Non-reportable positions” are small traders who do not have a significant impact on the price. – Source: InstaForex

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