EUR/USD 5M analysis.
During the last trading day of the week, the EUR/USD pair easily and simply resumed its downward movement. Recall that the ECB meeting was held a day earlier, the results of which were predictable, but could not surprise anyone. The European regulator again took the most "dovish" position, so it was difficult for the European currency to rise in price. However, last week, it was still able to demonstrate an increase of 300 points, which can only be technical, because there were no fundamental reasons for strengthening the euro. Thus, again from a technical point of view, the fall of the euro on Friday was logical. The situation in Ukraine remains difficult, and no one knows when Moscow's military operation will end. Therefore, purely theoretically, risky currencies can fall as much as they like.
There were several trading signals on Friday, but they all left much to be desired. Unfortunately, the pair began a downward movement only in the afternoon, and in the first half, it traded mainly around the level of 1.0990. That is why most of the signals formed near this level. The first sell signal was formed when the price was fixed below the level of 1.0990. Traders were lucky, as the price managed to go down 15 points, so a Stop Loss had to be set to breakeven, at which the transaction closed. This was followed by a buy signal when the price was fixed above the level of 1.0990. In this case, the pair also passed more than 15 points, so this deal should have closed at breakeven on Stop Loss. The next two signals near the 1.0990 level should have already been ignored. The last sell signal about overcoming the critical line could have been worked out, but it was formed almost in the evening, shortly before the closing of trading. Therefore, it would be better to filter it out, although it just turned out to be profitable. In general, the euro currency has maintained a downward mood.
COT Report:
The new COT report, which was released on Friday, showed a weakening of the "bullish" mood among professional traders. The first weakening in the last few months. We have already drawn the attention of traders to the fact that major players were actively building up long positions, but at the same time, the European currency was falling and continues to do so. This time, the "Non-commercial" group has opened about 15 thousand contracts for purchase and 20.5 thousand contracts for sale. Thus, the net position decreased by 5.5 thousand. Despite this decrease, the overall mood remains bullish, and the trend is downward. The problem is that the demand among major players for the euro currency may be growing, but at the same time, the demand for the American currency is also growing and at a much higher rate. Therefore, we are now dealing not with a classic market situation, when the demand for one currency is growing and the second is declining, but with a situation where the demand is growing for both currencies, but one of them is much faster and stronger. From our point of view, this explains the growth of the dollar in recent weeks on all fronts. Thus, now the data from the COT reports simply do not coincide with what is happening with the euro/dollar pair. Therefore, it is impossible to make a forecast for the pair based on COT reports.
EUR/USD 1H analysis.
On the hourly timeframe, it can be seen that the downward trend continues, as the price continues to be below the trend line. The pair managed to correct last week, but it did not reach the trend line and could not update any of its local highs. Therefore, there is no reason to expect the end of the downward trend now. On Monday, we allocate the following levels for trading - 1.0729, 1.0806, 1.1122, as well as the Senkou Span B (1.1039) and Kijun-sen (1.0983) lines. There are also auxiliary 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 "overcoming" 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 against possible losses if the signal turns out to be false. On March 14, a report on industrial production will be published in the European Union, but in the current circumstances, traders are unlikely to pay attention to it. There won't be a single report or event in the States at all. We would like to say that today there will probably be low volatility and no trend, but geopolitics may force traders to trade very actively again.
Explanations to the illustrations:
Price levels of support and resistance (resistance/support) - thick red lines, near which the movement may end. They are not sources of trading signals.
Kijun-sen and Senkou Span B lines - the lines of the Ichimoku indicator, transferred to the hourly timeframe from the 4-hour one. Are strong lines.
Extreme levels - thin red lines from which the price bounced earlier. They are sources of trading signals.
Yellow lines - trend lines, trend channels, and any other technical patterns.
Indicator 1 on the COT charts - the net position size of each category of traders.
Indicator 2 on the COT charts - the net position size for the "Non-commercial" group.
