EUR/USD 5M
The EUR/USD pair was trading quite actively again on April 23. The upward trend resumed, and both uptrend lines (on the hourly timeframe) remain relevant. The upward movement has been going on for almost a month, and during this time there were practically no corrections. The upward movement on Friday continued all day and even at night. Thus, in principle, our expectations continue to be justified, since we have already repeatedly said that we are waiting for the continuation of the global upward trend. Now the pair's quotes have reached the 1.2100 level, which we named as the target a week ago. It's time to adjust. Unfortunately, few signals were generated on Friday, or rather one. The pair reached an extreme level just once, and did not even approach the Kijun-sen line. And so the quotes crossed the 1.2081 level by the end of the working day and it was formally possible to open long positions here, but, of course, it should not have been done near the end of the trading day. As for macroeconomic reports, there were plenty of them throughout the day. The number "1" marks the business activity indices in the services and manufacturing sectors of the European Union, which turned out to be higher than the forecasted values, however, as we can see, the price was growing before these reports were published, and then it took a break. The same market reaction followed when the reports on business activity in the service and manufacturing sectors of the United States (figure "2") were released. Virtually non existent. The indices also turned out to be stronger than forecasts and the dollar rose in price by only 15 points. The number "3" marks the speeches of Janet Yellen and Christine Lagarde, which did not provide any new information to the markets at all.
EUR/USD 1H
The picture on the hourly timeframe is the same. An upward movement. There are pullbacks, but they are small. In general, the pair gained about 400 points with practically no corrections. Corrections on the lower timeframes are even more or less visible, and they are practically absent on the higher ones. We have repeatedly listed the reasons in fundamental articles, we recommend that you familiarize yourself. In general, everything continues to flow according to plan. Bears are now practically absent from the market, plus the supply of the dollar is constantly growing. Many factors are currently not in favor of the greenback. In general, the upward movement may reach annual highs around the 1.2350 level. We still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels are 1.2076, 1.2108 and 1.2145, as well as the Kijun-sen line (1.2045). Signals can be rebounds or breakthroughs of these levels and lines. 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. No important events scheduled in the European Union that deserve your attention on Monday, meanwhile, we do have a more or less important report on orders for durable goods that will be released in America. Theoretically, it can provoke a reaction of traders, we recommend that you pay attention to it.
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 120 points during the last reporting week (April 13-19). Notably, major players have actively been reducing buy contracts (longs) and opened sell contracts (shorts) instead. In the "non-commercial" group, the total number of Buy-positions has decreased from 240,000 to 190,000 and the number of Sell-positions has grown from 76,000 to 127,000 since the beginning of February. Therefore, it is evident that the bullish sentiment has been waning down, however, the sentiment is still bullish, and in the last two weeks it has begun to strengthen again. Recall that the Commitment of Traders (COT) reports has signalled the end of the upward trend since last September, when the lines of the first indicator moved as far apart as possible. However, we still remind you of the fact that money is still being injected into the US economy. Simply put, big players can trade as they please, in any direction, buy any currency, but if at the same time the money supply of dollars increases by trillions, the influence of the players themselves on the foreign exchange market becomes less. Accordingly, now the factor of an increasing money supply in the United States is in first place, not the behavior of non-commercial and commercial traders in the foreign exchange market. Professional traders opened 6,200 buy contracts (longs) and closed 8,500 sell contracts (shorts) during the last reporting week. Thus, their net position increased by 14,700 contracts. And so it is possible that the major players realized that the euro would still rise, and the dollar would fall, and so they decided to trade with the trend themselves. If earlier it was the big players who formed the trend, now they follow the trend. In general, from our perspective, there is a very high likelihood that the euro will keep growing in 2021.
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.
