EUR/USD 5M
The EUR/USD pair extensively traded on April 9. Bulls and bears passed the initiative to each other during the day, the pair initially went down and then up. However, not a single important macroeconomic or fundamental event was planned for Friday so market participants had nothing to react to during the day. Volatility was quite low, and the upward trend is generally preserved. As for the signals, an extremely small number of them were formed on Friday. The pair mostly moved sideways on the 5-minute timeframe in the European session. Thus, not a single signal was generated in this flat, and in any case, you are advised to trade in a flat. The situation slightly improved with the opening of the US session, when the pair initially settled below the extremum level of 1.1882, forming a sell signal, and just an hour later a buy signal formed above this level. Thus, the first signal turned out to be false and closed at a loss of about 13 points. The second signal turned out to be more successful, however, the price did not reach the target level of 1.1911 by just a point, so we consider the closing level of the transaction to be 1.1899 - the closing level of trading on Friday. As a result, a loss by a couple of points. It could be worse given the flat and low volatility.
EUR/USD 1H
We see that the euro/dollar pair did not particularly strive to update local highs and continue the upward trend on the hourly timeframe last Friday. We have formed a trend line for clarity, but the price is located very far from it, so it is more formal. The European Union will publish a report on retail sales on Monday, April 12, but nothing in the US. Therefore, the macroeconomic background will remain very weak. In general, we are inclined towards the pair's succeeding growth, but a more tangible downward correction may begin. Thus, we still recommend trading from important levels and lines that are plotted on the hourly timeframe. The nearest important levels are 1.1861 and 1.1911, as well as the Kijun-sen line (1.1850). Signals can be rebounds and once levels and lines are surpassed. Do not forget about placing a Stop Loss order at breakeven if the price moves 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
Recall that the EUR/USD pair increased by 50 points during the last reporting week (March 30 - April 5). However, what does the Commitment of Traders (COT) reports reveal about the outlook for the currency pair? Let us recall that all the latest reports indicated a significant decrease in the number of buy contracts from the non-commercial group of traders, which, we recall, is the most important category of participants in the foreign exchange market. So, over the past five weeks, non-commercial traders have closed approximately 35,000 Buy contracts (longs) and opened about 44,000 Sell contracts (shorts). Thus, in the last five weeks alone, the net position for professional players has decreased by almost 80,000 contracts. Basically, the second indicator in the chart perfectly shows how the net position of major players has changed recently. This suggests that the mood of professional traders was becoming more bearish or, better to say, less bullish, because the total number of Buy contracts still exceeded the total number of Sell contracts. But if it was a threefold gap in numbers a couple of months ago, now the ratio is 187,000-127,000. Thus, if we only take the COT reports into account, then we can conclude that the upward trend is over and we are waiting for the dollar to strengthen further. The latest COT report, which came out on April 9, has gotten boring. The non-commercial group has closed 7,700 Buy contracts and 6,700 Sell contracts. Thus, the mood of the major players practically did not change over the last reporting week. Take note of the fact that a strong inflation and money supply in the United States can cause the dollar to fall, and this will not even depend on market participants. The money supply will become even bigger, and the dollar supply will increase, so even if traders don't sell the dollar, it can still fall.
Explanations for the chart:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.
Support and resistance areas are areas from which the price has repeatedly rebounded off.
Yellow lines are trend lines, trend channels and any other technical patterns.
Indicator 1 on the COT charts is the size of the net position of each category of traders.
Indicator 2 on the COT charts is the size of the net position for the non-commercial group.
