EUR/USD – 4H.
Good day, dear traders! As seen on the 4-hour chart, the EUR/USD currency pair continues the growth process in the direction of the corrective levels of 38.2% (1.1061) and 50.0% (1.1083), as I said yesterday. It is difficult for me to say that the information background was the reason for the growth of the European currency, since the report on the EU GDP, which was released today, frankly disappointed traders, showing an increase of only 1% in the fourth quarter, although market expectations were 1.2%. However, after the formation of two bullish divergences and almost perfect working out of the target level for the previous trading idea, I expected a corrective pullback within the continuing downward trend corridor. Thus, since the corridor remains in force, I expect the pair to turn in favor of the US currency near its upper line and resume falling towards the levels of 1.10 and 1.09. The rebound of the pair’s quotes from one of the Fibo levels indicated by the down arrows can be regarded as signals for sales. If the pair closes above the descending corridor, this trading idea will be canceled.
Forecast for EUR/USD and trading recommendations:
The long-term trading idea remains valid. Traders still have a long-term target for a fall near the level of 1.0850, confirmed by the closing of the pair’s rate below the trend line. It can take several weeks to complete.
A new short-term trading idea is to sell the pair when rebounding from the corrective levels of 38.2%, 50.0% or 61.8%. A mandatory condition is that quotes do not go beyond the descending corridor.