EUR/USD 5M
The EUR/USD pair was trading much more calmly on Thursday than the previous day in the evening, when the results of the Federal Reserve meeting were announced. However, the downward movement continued throughout the day. Yesterday we said in our articles that, most likely, the Europeans will also begin to work out all the decisions and statements made the night before yesterday. And so it happened. There were no major reports or events on Thursday. However, in any case, they would hardly have had any impact on the pair's movement, since the markets remained impressed by the Fed's results. Several interesting signals were formed during the day and now we will analyze them. The first signal was formed, as often happens, at the very beginning of the European trading session. A breakthrough of the extremum level of 1.1988 was not very accurate, nevertheless it took place. It was necessary to open short positions here. Subsequently, the price dropped to the extreme level of 1.1951, around which it spent quite a long time. It was a rather difficult episode, but the open short positions had to be held, since there was no clear rebound from the level, as well as a clear consolidation above it. Subsequently, the price once again returned to this level and bounced off it more accurately, which became another signal to keep short positions open. By the middle of the US trading session, when traders had to think about manually closing a deal, the quotes dropped to the next extreme level of 1.1915, where short positions should have been closed. Thus, on the first signal, it was possible to earn about 65 points. But even if traders closed the deal earlier, they still made a profit. In principle, the movement today was quite simple - almost all day in one direction.
Overview of the EUR/USD pair. June 18. The Fed made it clear that it will begin to tighten monetary policy, but the timing is still very vague.
Overview of the GBP/USD pair. June 18. A new scandal involving Boris Johnson and a sharp drop in the pound against the backdrop of the Fed meeting.
EUR/USD 1H
The euro/dollar pair fell on the hourly timeframe, but the downward movement is much more clear here. In total, the pair lost about 200 points per day, which contrasts very strongly with the volatility over the previous 15 trading days, when the pair passed 40-50 points a day and not always in one direction. Thus, the downward movement has intensified, but how long will the bears' fuse last? After all, they were clearly helped by the results of the Fed meeting. Without them, the pair might have continued to push in a limited price range. The downward trend continues, but the price has moved well below the downward trend, so it is now formal. On Friday, we still recommend trading from important levels and lines. The closest important levels at this time are 1.1861, 1.1915, 1.1950, 1.1988, as well as the Senkou Span B (1.2173) and Kijun-sen (1.2044) lines. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. 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. There are no important publications or fundamental events scheduled for Friday in the European Union and the United States. Therefore, the markets may finally calm down today and a correction may begin.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair fell by 40 points during the last reporting week (June 1-7). All the weeks that recently passed have ended with such minor changes. Not surprising given that the pair has been in a limited range for several weeks now. Professional traders closed about 5,500 buy contracts (longs) and around 400 sell contracts (shorts) during the reporting week. Thus, the net position for the "non-commercial" group decreased by 5,000 contracts. These are small changes for the European currency, which is still the most popular among all players in the world after the dollar itself. Recently, however, non-commercial traders have mainly increased their longs, so the data from the last reporting week can be considered an exception in some way. So far, the main lines of the first indicator continue to move away from each other, which indicates that the bullish mood on the market is preserved. Consequently, we have the right to count on a new strengthening of the European currency, especially since the factor of the global increase in the money supply in the United States continues to work in favor of the European currency.
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.
