EUR/USD 5M
The EUR/USD pair still traded in a very calm manner on April 15. The volatility indicator was "at zero" for the second day in a row - only about 40 points. Therefore, it was still very difficult to trade, as not only are false signals formed in a flat, but the price also passes in one direction at around 20-25 points, which, at best, is enough to set the Stop Loss level at breakeven ... Nevertheless, let's look at the chart and try to understand how you should have traded on Thursday. As usual, nothing interesting during the Asian session. The movements were a bit more active with the opening of the European session. The pair almost immediately rose to the extremum level of 1.1988 and bounced off it, forming the first sell signal of the day. Not having gone down even 15 points, an upward reversal followed and the quotes returned to the 1.1988 level. Short positions should have been opened here, since no Stop Loss was set, and the price did not settle above the 1.1988 level, so there was no signal to cancel short positions either. The quote passed around 20 points to the downside at the beginning of the US session, which was enough to set Stop Loss to zero. Moreover, this happened after reports on retail sales and claims for unemployment benefits in the United States were released. As we remember, it is better to leave the market when statistics are published. Thus, before the first report was published (the number "1" in the chart ), the short position should have been closed manually. As a result, this trade brought even 13 points of profit. Afterwards, a report on industrial production in the US was published (figure "2" in the chart), which turned out to be weaker than forecasts, so the dollar began to decline. However, this did not matter any more, since new signals were no longer generated for the rest of the day.
EUR/USD 1H
Everything looks the same on the hourly timeframe. The pair has been "marking time" around the 1.1988 level and has not been able to settle above it for the second consecutive day. Thus, it is highly likely that we will see a round of downward correction on Friday. Recall that we have two trend lines at our disposal, both to the upside, therefore, the trend is definitely rising. The reference point for a possible correction is the Kijun-sen line. The next target is the first trend line. The European Union is set to publish a report on inflation for March, which, according to forecasts, is unlikely to change compared to February, and will remain at 1.3% Y/Y. Thus, if the forecast is justified, there is no need to wait for a reaction. In the afternoon, we have the US Consumer Sentiment Index from the University of Michigan, which is even less likely to provoke market reactions. We still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels are 1.1915 and 1.1988, as well as the Kijun-sen line (1.1930) and the trend line. 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.
