EUR/USD 5M
The volatility for the EUR/USD pair was very weak again on Wednesday and amounted to only 33 points. As we warned yesterday, reports on industrial production in the EU and the US had no effect on the pair's movement and the mood of the markets. This is clearly seen in the chart above: the first report is marked with the number "1", the second - with the number "2". Thus, not only was volatility extremely low yesterday, but the pair was moving sideways all day. Therefore, it makes no sense to analyze macroeconomic reports, although a report on production in the European Union could provoke a reaction from traders. As for trading signals, there is no particular point in analyzing them either. All signals were formed near the Kijun-sen and Senkou Span B lines. Since these lines are located close to each other, there were many signals, but there were few movements. The first buy signal in the form of a consolidation above the critical line could still be worked out with a long position. After the quotes settled above the Senkou Span B line, it was possible to keep long positions open. However, later the price settled below Senkou Span B, failing to rise to the level of 1.1857, where it would have been possible to take profit. And then it returned to the Kijun-sen line altogether, bouncing away from it. Formally, it was possible to open long positions from the Kijun-sen line for the second time, but this time the price did not manage to get away above the Senkou Span B, so they had to be closed as quickly as possible. As a result, traders could have earned just a couple of points yesterday.
Overview of the EUR/USD pair. September 16. The market is baffled by the decline in US inflation.
Overview of the GBP/USD pair. September 16. London threatens Brussels to withdraw from the Northern Ireland Protocol.
EUR/USD 1H
The euro/dollar pair has generally stood in one place on the hourly timeframe in recent days. From time to time, the pair breaks in one direction or the other, but the fuse immediately dries up, and the price returns to its original place. Thus, there is currently no clear trend at all. The price crossed the downward trend line, but did not start an upward movement. It is also now unable to resume the downward movement. Therefore, it is best to wait for the development of events and not rush to open deals. On Thursday, we continue to draw traders' attention to important levels and lines - 1.1750, 1.1805, 1.1857, 1.1894, as well as the Senkou Span B (1.1846) and Kijun-sen (1.1810) lines. The Ichimoku indicator lines can change their position during the day, which should be taken into account when looking for trading signals. However, in case of an absolute flat (Bollinger bands on the 4-hour timeframe are now evidence of this), the lines of the Ichimoku indicator do not play any role. 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 points in the right direction. This will protect you against possible losses if the signal turns out to be false. On September 16, a retail sales report will be published in the United States, and European Central Bank President Christine Lagarde will speak in the European Union. We do not expect anything special from either the first or the second. Lagarde has spoken at least three times since last Thursday, and each time there has been no reaction to her speeches. The retail sales report could provoke a move, but it is unlikely to be strong.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair increased by 75 points during the last reporting week (August 31 - September 6). But the Commitment of Traders (COT) reports, which for several months in a row signaled a decrease in the net position of non-commercial traders, just before level 0 (the first indicator) stopped selling the European currency. That is, at this time the number of open long and short positions in the "non-commercial" group is practically the same, which indicates the neutral mood of this group. Formally, it remains bullish, since a slightly larger number of buy contracts (longs) are still concentrated in the hands of large players, but this advantage is small. Thus, the COT reports do not currently answer the most important questions. Namely: will the bears be able to overcome the 1.1700 level to try to form a downward trend? Are the bulls ready to start forming a new upward trend? During the reporting week, professional traders closed less than a thousand Buy contracts (longs) and 16.5 thousand Sell contracts (shorts). Thus, the net position grew by 15,000 at once, and the mood became a little more bullish. However, one should not forget about the Fed factor as well. Let us remind you that if money injections into the American economy continue, this will further lead to an increase in the money supply and to natural inflation of the dollar. That is, no matter how the players get rid of the European currency, if the Federal Reserve continues to print $120 billion a month, this will not lead to a strong dollar growth and, rather, vice versa. Take note that the stock market is growing rapidly at this time. This means that most of the money that came into the economy from the Fed flows into the stock market. If investors stop buying shares, this could lead to an excess of free money supply, which will provoke a new fall in the dollar.
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.
