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On Tuesday, the EUR/USD pair rebounded from the resistance level of 1.1645–1.1656 and showed a slight decline. As of Wednesday morning, the quotes once again returned to this zone. A fresh rebound from it will again work in favor of the U.S. dollar and lead to a decline toward the support level of 1.1594–1.1607. A consolidation of the pair above this zone will increase the likelihood of further growth toward the next Fibonacci level of 38.2% at 1.1718.
The wave structure on the hourly chart remains simple and clear. The last completed downward wave did not break the low of the previous wave, while the last upward wave (still forming) broke the previous high. Thus, the trend has officially shifted to bullish. It is still difficult to call it a strong trend, but in recent months the bulls have demonstrated only one thing — their weakness. The Fed's monetary easing should give them additional strength, as the ECB does not intend to lower interest rates in the near future.
On Tuesday, traders might have expected more active movements in the pair, but their hopes were once again dashed. Despite a fairly attractive news background, EUR/USD again did not consider it necessary to move actively. Market activity recently has been the main problem for traders, as it is extremely low. As a result, movements are weak and chart levels are being poorly tested. Returning to the news background, the U.S. released the JOLTS and ADP reports. While the ADP report can be overlooked, the JOLTS report showed higher values than expected. Bears reacted to this report and the dollar rose slightly, but it provided no real benefit, since today the pair has already returned back to the 1.1645–1.1656 level. It is worth recalling that the FOMC meeting will take place in the evening, and the market may already be pricing it in. A decision to ease monetary policy is beyond doubt; all that remains is to wait for official confirmation.
On the 4-hour chart, the pair returned to the resistance level of 1.1649–1.1680. A rebound from this zone will again work in favor of the U.S. dollar and lead to a decline toward the 38.2% Fibonacci level at 1.1538. A consolidation above the resistance zone of 1.1649–1.1680 will increase the likelihood of continued growth toward the next corrective level of 0.0% at 1.1829. No emerging divergences are observed today on any indicator. The bullish trend has every chance of resuming.
Commitments of Traders (COT) report:
During the last reporting week, professional traders opened 5,893 long positions and 10,312 short positions. COT reports have resumed after the shutdown, but for now only outdated data is being published — for October. Sentiment in the "Non-commercial" group remains bullish thanks to Donald Trump and continues to strengthen over time. The total number of long positions held by speculators is now 250,000, while the number of short positions is 143,000.
For thirty-three consecutive weeks, large players were reducing short positions and increasing long positions. Donald Trump's policies remain the most influential factor for traders, as they may create numerous problems that could have long-term and structural consequences for America. Despite the signing of several important trade agreements, analysts fear a recession in the U.S. economy, as well as a loss of Fed independence under Trump's pressure and in light of Jerome Powell's resignation scheduled for May next year.
News calendar for the U.S. and the Eurozone:
The economic events calendar for December 10 contains four entries, three of which have "mega-important" status. The influence of the news background on market sentiment on Wednesday evening may be very strong.
EUR/USD forecast and trader recommendations:
Short positions in the pair are possible today upon a rebound from the 1.1645–1.1656 level on the hourly chart with a target of 1.1594–1.1607. Long positions may be opened with a target of 1.1718 if the pair closes above the 1.1645–1.1656 level.
Fibonacci grids are drawn from 1.1392–1.1919 on the hourly chart and from 1.1066–1.1829 on the 4-hour chart.
*Analiza tržišta koja se ovde nalazi namenjena je boljem razumevanju tržišta i ne pruža instrukcije za vršenje trgovanja.
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