EUR/USD 5M
The EUR/USD pair was finally able to grow a bit on Wednesday. It seems that this growth happened by the method of exclusion. Traders failed to overcome the 1.0760 level, so growth began. However, now it looks like a banal technical rollback. Or as an acceleration before a new attempt to overcome 1.0760. There were no fundamental or macroeconomic grounds for strengthening the European currency on Wednesday. The only more or less significant report of the day – industrial production in the European Union for February – turned out to be neutral and ignored. All the other events of the day did not deserve any attention at all. We can only assume one thing – the pair could have reacted to the message about Moscow's new offer to Kiev on a peace agreement. This was stated by Dmitry Peskov. Although the negotiations have been put on pause, and Kiev has already managed to declare that all its proposals were outlined in Istanbul, there is still a small hope for the end of the military conflict. But we believe that this factor will not support the euro and the pound for long. In the near future, the fall may resume.
Several trading signals were formed on Wednesday. First, the pair bounced off the extreme level of 1.0806, forming a buy signal, after which the price went up about 50 points. However, since all the movements of the day were not based on any specific events, it was almost impossible to predict a downward turn at the end of the European session. There wasn't even any technical level or line! And since the fall began, during which the pair settled below the critical line, it was not possible to earn a lot on a long position. The sell signal near the Kijun-sen line turned out to be false at all. After its formation, the pair could not go down even 10 points. As a result, two signals were formed near the critical line and both are false. The last buy signal should have been ignored.
COT report:
The latest Commitment of Traders (COT) reports are more and more discouraging... because the big players continue to build up long positions in the euro currency! During the reporting week, the number of long positions increased by another 10,800, and the number of shorts from the "non-commercial" group decreased by 1,000. Thus, the net position increased by 12,000 contracts. This means that the bullish mood has intensified. It is bullish, since the total number of long positions now exceeds the total number of short positions for non-commercial traders by 40,000!!! The green line of the first indicator in the chart above clearly signals that the mood of professional players has been bullish in the last three and a half months. Accordingly, the paradox lies in the fact that the mood of traders is bullish, but the euro continues to fall almost non-stop, which is also clearly seen in the chart above. We have already explained in previous articles that this effect is achieved by a higher demand for the US dollar. The demand for the dollar is higher than the demand for the euro, which is why the dollar is growing in tandem with the euro. Based on this conclusion, the data of the COT reports on the euro now do not make it possible to predict the further movement of the pair. They are, one might say, meaningless. However, if the demand for the euro currency also begins to fall among professional players, this may lead to an even greater fall in the euro exchange rate, since the demand for the dollar is likely to remain high due to complex geopolitics and macroeconomics.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. April 21. Russia-NATO relations are heating up, the Ukraine-Russia conflict is approaching a turning point.
Overview of the GBP/USD pair. April 21. French presidential election: artificial tension and ostentatious intrigue formed.
Forecast and trading signals for GBP/USD on April 21. Detailed analysis of the movement of the pair and trading transactions.
EUR/USD 1H
It can be seen that the pair has started a correction on the hourly timeframe, but very weak at the moment. So far, the euro has not managed to overcome even the Senkou Span B line, so further strengthening is already a big question. Most likely, the downward movement will be resumed today or tomorrow. But if Senkou Span B is still overcome, then the euro may continue to rise to the level of 1.0924. We allocate the following levels for trading on Thursday – 1.0729, 1.0761, 1.0806, 1.0924 (support level), 1.0938, 1.1036, as well as the Senkou Span B (1.0872) and Kijun-sen (1.0840) lines. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals will be formed near them. 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. An inflation report is scheduled in the European Union on April 21, but it will not provoke any reaction, since this is the second inflation estimate for March. But today European Central Bank President Christine Lagarde and Federal Reserve Chairman Jerome Powell will make speeches, and this may already be really interesting.
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.
