EUR/USD 5M
The EUR/USD pair continued to adjust against a purely hypothetical downward trend that had formed in recent weeks. "Purely hypothetical", because there is no trend line or channel at the moment. There are simply none or at least two reference points on which to build them. As a result, the price corrected to the critical line, bounced off it, but immediately came across the Senkou Span B line on its way down. As a result, at the moment the price was squeezed between these lines, and the lines themselves got as close as possible to each other, which indicates a high probability of a flat in the coming days. By the way, the pair had reasons for a good move. The most important report of the day – on retail sales in the United States - turned out to be very strong, much better than forecasts. But this report was not enough for the market to have a desire to trade more actively than by 50 points of volatility per day.
Three trading signals were generated during the day. First, the price overcame the extreme level of 1.1375 and immediately hit the critical line. Therefore, formally, this signal could not be worked out – there was a high probability of a rebound from Kijun-sen. And so it happened. And this was the second signal – for short positions. It could also be ignored, because this time there was already a high probability of a rebound from the 1.1375 level. And so the pair spent five hours between these two lines, in absolute flat. As a result, it only settled below 1.1375 at the beginning of the US trading session, which could be used as a signal to open short positions. However, the price managed to go down only 14 points, so the deal should have been closed manually later in the evening. The profit on it was 0.
COT report
The new Commitment of Traders (COT) report, which was released on Friday, did not show any major changes, and its data does not reflect what is happening in the foreign exchange market at all. In short, professional players continued to increase long positions during the reporting week, as well as get rid of short positions. In total, the net position of the non-commercial group increased by 11,000. So now we have a picture in which major players have been buying the euro currency for several consecutive weeks, and their mood is clearly bullish. The new COT report shows the behavior of traders a week earlier (it comes out with a 3-day delay). And last week, the euro was growing steadily. However, look at the chart above: is the current technical picture similar to the beginning of an upward trend? After all, even last week the price updated its annual lows! Thus, formally, it can be concluded that the major players are already looking towards long positions on the euro currency, but in practice this mood is so unstable that at any moment it can result in a new fall of the euro/dollar pair. The main factor that should be taken into account now is the lack of growth factors in the euro. And if we add to this the tense geopolitical situation that developed at the beginning of the new year, then it is the dollar that has additional growth factors. And there were plenty of them even without geopolitics. Thus, as before, there is a high probability of dollar growth.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. February 17. "That's it, there will be no kin, the electricity is over."
Overview of the GBP/USD pair. February 17. Boris Johnson is doing his best to distract attention from the scandal with his own participation through the Ukrainian-Russian conflict.
Forecast and trading signals for GBP/USD on February 17. Detailed analysis of the movement of the pair and trading transactions.
EUR/USD 1H
The euro/dollar pair reached a critical line on the hourly timeframe, but could not continue further upward movement. At the moment, the market is in limbo, and traders do not know what to do with the pair. Perhaps this situation has developed because of the complex geopolitics for the whole world. However, there are no new data on the Ukrainian-Russian conflict now. There is nothing to react to. We allocate the following levels for trading for Thursday – 1.1192, 1.1234, 1.1274, 1.1375, 1.1482, 1.1507, as well as the Senkou Span B (1.1365) and Kijun-sen (1.1395) lines. There are also support and resistance levels, but no signals will be formed near them. The lines of the Ichimoku indicator may change their position during the day, which should be taken into account when searching for trading signals. Signals can be "bounces" and "breakthrough" levels - extremes and lines. Do not forget about placing a Stop Loss order at breakeven if the price went in the right direction of 15 points. This will protect you against possible losses if the signal turns out to be false. The calendar of macroeconomic events in the European Union is completely empty on Thursday, and reports on applications for unemployment benefits and the construction sector will be published in the United States, and speeches by Federal Reserve representatives James Bullard and Loretta Meister will take place. Perhaps they will tell the market something important, but it is unlikely that all this information will be followed by a market reaction. Most likely, we will have another boring day if "geopolitics" does not interfere.
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.
