Technical analysis of EUR/USD for April 27, 2021. COT Report

EUR/USD – 1H.

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Hello, dear traders! Yesterday, EUR/USD went up to 1.2117, reversed and fell to the 127.2% Fibo level of 1.2067. If the price closes below this level, the bearish trend will extend to the 100.0% retracement of 1.1989. However, the price has once pulled back from 1.2067. The US dollar has recently been trying to advance. Yet, it has just been a correction. The US will face serious tax hikes soon. The US government is preparing to increase taxes on the wealthy (whose income exceeds $1 million each year) and large corporations. According to President Joe Biden, tax hikes will help increase the country's budget that reduced sharply amid the pandemic, the economic crisis, and a row of stimulus packages. Given the circumstances, the US' public debt spiked by several trillion dollars. The Republican Party is completely against the President's initiative, which comes as no surprise, since it has always backed the interests of the wealthy. Thus, capital gains taxes may be raised to 50%. At the same time it seems that nothing stands in the way of Democrats. They are likely to approve the bill since they hold a majority of seats in Congress, unless there is no divide within the party. The US dollar may remain under pressure due to the new legislature that will diminish the country's investment attractiveness.

EUR/USD – 4H.

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On the H4 chart, the bullish trend resumed after the price has been trading near the 161.8% retracement level of 1.2027 for several days. However, the bearish divergence has almost immediately triggered a fall to the ascending trend line that is still indicating bullish sentiment in the market. If the price closes below this line, the price may go down to 1.1836.

EUR/USD – Daily.

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On the daily chart, the bullish trend on EUR/USD has resumed. The quotes may consolidate above the trend line today or tomorrow. If so, the price may go up to the 423.6% retracement level of 1.2496. In case of a reversal, the price may drop to the 261.8% Fibo level of 1.1822.

EUR/USD – Weekly.

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On the weekly chart, EUR/USD has consolidated above the narrowing triangle. The price may well rise in the long term.

News background:

On April 26, the EU's macroeconomic calendar was empty. Meanwhile, the US published its durable goods orders report. The reading turned out to be worse than market expectations.

Macroeconomic calendar for the United States and the European Union:

On April 27, the macroeconomic calendar will be empty both in the EU and the US.

Commitments of traders report (COT):analytics6087ac168a491.jpg

According to the COT report released on Friday, Non-commercial traders were increasing the number of long contracts (6,283) and closing short contracts (8.534) during the reporting week, which indicates bullish sentiment. This means that the euro is likely to extend the rally. The gap between the number of long and short contracts is widening.

Forecast for EUR/USD:

Traders should sell EUR/USD if the price closes below the trend line on the H4 chart. In such a case the targets are seen at 1.1989 and 1.1922. One should buy the pair if the price rebounds from 1.2067 on the H1 chart. The targets are seen at 1.2117 and 1.2166.

Terms:

Non-commercial traders are major market players: banks, hedge funds, investment funds, private and large investors.

Commercial traders are commercial enterprises, firms, banks, corporations, companies that buy currency not for speculative profit, but for ensuring current activities or export-import operations.

Non-reportable positions are small traders who do not have a significant impact on the price.

The material has been provided by InstaForex Company - www.instaforex.com

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