On Thursday, the EUR/USD pair made another reversal in favor of the euro and closed once again above the 200.0% corrective level at 1.1165. The fact that the price is essentially ignoring the 200.0% level suggests a sideways market. Although the pair has experienced minimal growth in recent days, the current movement is predominantly horizontal. Therefore, today, we can expect a close below the 1.1165 level and a fall toward the support zone of 1.1070–1.1081.
The wave pattern has become a bit more complex but overall raises no significant concerns. The last completed wave down (September 19–23) did not break the low of the previous wave, while the new wave up broke the highs of the previous two waves. Therefore, the pair has either entered a complicated sideways pattern or is gradually starting to form a new "bullish" trend. Consolidation below the support zone of 1.1070–1.1081 will negate the emerging "bullish" trend.
The news released on Thursday was contradictory. The key reports of the day on U.S. GDP and durable goods orders showed higher values than traders had expected. However, this once again practically did not help the U.S. dollar. Within half an hour to an hour after this data was released, the bears attempted an attack, but then speeches from Christine Lagarde and Jerome Powell took place, and the bulls took charge. Interestingly, Lagarde and Powell barely touched on the topic of monetary policy. Therefore, the bulls had no real reason to launch a new offensive. I believe the U.S. reports were far more important than the "empty" speeches from the ECB and Fed presidents. However, we did not see the expected growth of the U.S. dollar yesterday, though we might see it today. The U.S. currency remains in a very weak position but has avoided further decline over the past two weeks. Bears might slowly start to turn the trend in their favor, but next week could turn everything upside down again.
The wave pattern has become a bit more complex but overall raises no significant concerns. The last completed wave down (September 19–23) did not break the low of the previous wave, while the new wave up broke the highs of the previous two waves. Therefore, the pair has either entered a complicated sideways pattern or is gradually starting to form a new "bullish" trend. Consolidation below the support zone of 1.1070–1.1081 will negate the emerging "bullish" trend.
The news released on Thursday was contradictory. The key reports of the day on U.S. GDP and durable goods orders showed higher values than traders had expected. However, this once again practically did not help the U.S. dollar. Within half an hour to an hour after this data was released, the bears attempted an attack, but then speeches from Christine Lagarde and Jerome Powell took place, and the bulls took charge. Interestingly, Lagarde and Powell barely touched on the topic of monetary policy. Therefore, the bulls had no real reason to launch a new offensive. I believe the U.S. reports were far more important than the "empty" speeches from the ECB and Fed presidents. However, we did not see the expected growth of the U.S. dollar yesterday, though we might see it today. The U.S. currency remains in a very weak position but has avoided further decline over the past two weeks. Bears might slowly start to turn the trend in their favor, but next week could turn everything upside down again.
In the last reporting week, speculators closed 10,540 long positions and opened 1,247 short positions. The sentiment of the Non-commercial group turned bearish several months ago, but bulls are once again actively dominating. The total number of long positions held by speculators now stands at 182,000, while short positions total only 112,000.
However, for the second consecutive week, major players have been reducing their holdings in the euro. In my opinion, this could be a precursor to a new "bearish" trend or at least a correction. The key factor behind the dollar's decline, which was the anticipation of the FOMC's easing of monetary policy, has already been priced in, and the dollar no longer has reasons to fall. They may emerge over time, but for now, the rise of the U.S. currency seems more likely. Active selling of the euro has not yet started. If this selling begins, the probability of a "bearish" trend will increase.
News Calendar for the US and Eurozone:
- USA – Core Personal Consumption Expenditures (PCE) Index (12:30 UTC)
- USA – Personal Income and Expenditures (12:30 UTC)
- USA – University of Michigan Consumer Sentiment Index (14:00 UTC)
September 27 features several important entries on the economic calendar, particularly the Core Personal Consumption Expenditures Index. The influence of the news on trader sentiment is likely to be moderate tomorrow.
Forecast for EUR/USD and Trading Tips
Selling the pair is possible if it closes below 1.1165 on the hourly chart, with targets at 1.1081 and 1.1070. I wouldn't consider buying the pair right now, as it's highly likely trading sideways, and yesterday's growth was not supported by any significant factors.
The Fibonacci levels are plotted from 1.0917 to 1.0668 on the hourly chart and from 1.1139 to 1.0603 on the 4-hour chart.
