empty
22.11.2024 05:36 PM
EUR/USD. November 22. Business Activity Indices Weigh on the Euro

On Thursday, the EUR/USD pair consolidated below the 323.6% Fibonacci level at 1.0532 and continued its decline. Today, the price reached the 1.0420 level and came close to the 423.6% Fibonacci level at 1.0320. In my view, bears have started locking in profits, suggesting a potential pullback. The sharp decline in the euro today is often a sign of a final downward move.

This image is no longer relevant

The wave structure is clear. The last completed upward wave failed to surpass the peak of the previous wave, while the ongoing downward wave has easily broken through the last two lows. This indicates the pair is continuing its bearish trend. Bulls have lost control of the market entirely. Regaining it would require significant effort, which seems improbable in the near term. For the current trend to reverse, the pair would need to rise above the 1.0800 level—a scenario that appears unlikely in the short term.

On Thursday, the economic backdrop for the euro was not particularly favorable or eventful for traders. Several US reports triggered further strength in the US dollar, though the data itself was not overwhelmingly positive. The number of jobless claims was 213,000, slightly better than the expected 220,000. The Philadelphia PMI came in at -5.5, against forecasts of 8 to 10, while new home sales reached 3.96 million compared to expectations of 3.93 million. Despite this, the US dollar rallied throughout the day.

Today, however, the euro faced a more significant setback. Business activity indices for Germany and the EU's manufacturing sectors were largely in line with expectations, but the services sector delivered surprisingly weaker results. The market reacted with heavy euro selling, resulting in a drop of 150 points. This decline was excessive and disproportionate to the data, suggesting it was the final push by the bears before they pause for some time.

This image is no longer relevant

On the 4-hour chart, the pair retraced to the 100% Fibonacci corrective level at 1.0603, rebounded from it, and turned in favor of the US dollar. At the same time, bearish divergence formed on the CCI and RSI indicators. This provided several signals that the euro's decline had resumed, which were quickly executed. The pair has already closed below the 1.0436 level, paving the way for further declines toward the next Fibonacci corrective level of 161.8% at 1.0225.

Commitments of Traders (COT) Report

This image is no longer relevant

During the last reporting week, speculators opened 103 long positions and closed 14,113 short positions. The sentiment of the "Non-commercial" group has shifted to a bearish stance. Speculators now hold 160,000 long positions and 167,000 short positions.

For eight consecutive weeks, large market participants have been shedding the euro. This trend signals either the emergence of a new bearish movement or, at the very least, a strong global correction. The key factor driving the dollar's previous decline—expectations of a dovish shift by the FOMC—has already been priced in. With no immediate reason for a mass selloff of the dollar, the likelihood of continued USD strength remains higher. Technical analysis also supports the formation of a long-term bearish trend. Therefore, I anticipate a prolonged decline in the EUR/USD pair. The latest COT report provides no indication of a shift toward bullish sentiment.

Economic Calendar for the US and EU:

  • EU: Germany GDP Change (07:00 UTC)
  • EU: Germany Manufacturing PMI (08:30 UTC)
  • EU: Germany Services PMI (08:30 UTC)
  • EU: Eurozone Manufacturing PMI (09:00 UTC)
  • EU: Eurozone Services PMI (09:00 UTC)
  • US: Manufacturing PMI (14:45 UTC)
  • US: Services PMI (14:45 UTC)
  • US: University of Michigan Consumer Sentiment Index (15:00 UTC)

On November 23, the economic calendar includes several significant entries. These events could exert a notable influence on market sentiment for the remainder of the day.

EUR/USD Forecast and Trading Tips

Sales of the pair were possible with a rebound from the 1.0781–1.0797 zone on the hourly chart, targeting 1.0662. This target was achieved. Closing below this level allowed traders to maintain sales with targets at 1.0603 and 1.0532, both of which were also reached. A rebound from the 1.0603 level indicated opportunities for additional sales with targets at 1.0532 and 1.0420. These targets have been met as well.

I do not recommend buying the pair for now, despite the possibility of bears taking a short pause.

Fibonacci retracement levels are built from 1.1003 to 1.1214 on the hourly chart and from 1.0603 to 1.1214 on the 4-hour chart.

Samir Klishi,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

GBP/USD Forecast for March 20, 2025

Yesterday, the pound sterling closed at the opening level, targeting 1.3001. This allowed the price to start today with a quiet upward movement above this level. The Marlin oscillator successfully

Laurie Bailey 03:37 2025-03-20 UTC+2

EUR/USD Forecast for March 20, 2025

The Federal Reserve meeting has concluded, and our expectation that economic risks would be highlighted was correct. Both the accompanying statement and Powell's speech emphasized these concerns. The central bank

Laurie Bailey 03:37 2025-03-20 UTC+2

USD/JPY Forecast for March 20, 2025

Yesterday's Bank of Japan and Federal Reserve meetings were uneventful, but they did not provide any reasons for the yen to weaken against the dollar. Instead, the yen's strengthening trend

Laurie Bailey 03:37 2025-03-20 UTC+2

Trading Signals for EUR/USD for March 19-21, 2025: sell below 1.0900 (+2/8 Murray + 21 SMA)

If the euro falls and consolidates below 1.09 and below the 21 SMA in the coming hours, this could be seen as an opportunity to sell with targets at 1.0830

Dimitrios Zappas 14:01 2025-03-19 UTC+2

Trading Signals for GOLD (XAU/USD) for March 19-21, 2025: sell below $3,045 (+2/8 Murray + 21 SMA)

A consolidation below $3,045 could mean a technical correction toward the psychological level of $3,000. Therefore, we will look for shorting opportunities in the coming days as long

Dimitrios Zappas 14:00 2025-03-19 UTC+2

Forecast for EUR/USD on March 19, 2025

On Tuesday, the EUR/USD pair retested the 1.0944 level twice and encountered two rejections, leading to a reversal in favor of the U.S. dollar and initiating a new decline towards

Samir Klishi 10:46 2025-03-19 UTC+2

GBP/USD. March 19th. The British Pound Prepares for a Decline

On the hourly chart, the GBP/USD pair rallied to the 127.2% Fibonacci retracement level at 1.3003 on Tuesday, encountering two rejections at this level. As a result, a reversal

Samir Klishi 10:43 2025-03-19 UTC+2

Technical Analysis of Intraday Price Movement of Silver Commodity Instrument, Wednesday March 19, 2025.

Although on the 4-hour chart, the Silver commodity instrument is seen moving in a Bullish condition where this is indicated by its price movement moving above the EMA (21)

Arief Makmur 06:04 2025-03-19 UTC+2

Technical Analysis of Intraday Price Movement of AUD/JPY Cross Currency Pairs, Wednesday March 19, 2025.

On the 4-hour chart, the AUD/JPY cross currency pair appears to be moving in a strengthening condition, which is indicated by its price movement moving harmoniously within the Bullish Pitchfork

Arief Makmur 06:04 2025-03-19 UTC+2

EUR/USD and GBP/USD March 19 – Technical Analysis

The pair is currently testing the upper boundaries of the monthly Ichimoku cloud at 1.0943 and the weekly cloud at 1.0946. If buyers can consolidate in the bullish zone relative

Evangelos Poulakis 05:36 2025-03-19 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.