EUR/USD 5M
The EUR/USD pair continued its downward movement until it reached the level of 1.0000 on Tuesday. There were probably Take Profit orders for short positions near this level, since the slightest touch provoked a rollback to the upside. We cannot say that this rollback was strong, however, the euro started another attempt to correct a bit. The downward trend continues at this time, and the price is below all lines of the Ichimoku indicator. Although there is still no trend line or channel, the downward trend does not raise the slightest doubt. Thus, at the moment we can conclude that the euro's decline can resume at almost any moment. The US will publish a report on inflation, and if it shows acceleration again, the US dollar may again show strong growth. Neither the US nor the EU published a single important report on Tuesday.
Everything is disappointing in regards to trading signals for the euro/dollar pair for several consecutive days now. We have already said that there are practically no levels at the current price values, so the signals simply have nothing to form from. Also, the price is far enough from the lines of the Ichimoku indicator. The pair reached the level of 1.0072 by the end of the trading day, but this signal clearly should not have been worked out, since it was formed too late. The pair was approaching the level of 1.0072 at the end of the European session and the loss of 2 points could be considered a rebound, but this short position in any case would have been closed by Stop Loss at breakeven.
COT report:
The latest Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that they showed a blatant bullish mood of professional players, but at the same time, the euro was falling at the same time. At this time, the situation has changed, and NOT in favor of the euro. If earlier the mood was bullish, but the euro was falling, now the mood has become bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions increased by 7,700, and the number of shorts in the non-commercial group increased by 14,000. Accordingly, the net position decreased again, by almost 7,000 contracts. The mood of the big players remains bearish and has even increased slightly in recent weeks. From our point of view, this fact very eloquently indicates that at this time even commercial traders do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 17,000. Therefore, we can state that not only the demand for the US dollar remains high, but also the demand for the euro is quite low. This may lead to a new, even greater fall of the euro. In principle, over the past few months or even more, the euro has not been able to show even a tangible correction, not to mention something more. The highest upward movement was about 400 points.
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EUR/USD 1H
The downward trend continues on the hourly timeframe. The pair fell to price parity in the first two days of the week without any statistics or foundation. Thus, there is no doubt that the market is ready to trade at this time, even if there is no news. We allocate the following levels for trading on Wednesday - 1.0000, 1.0072, 1.0340-1.0366, 1.0485, as well as Senkou Span B (1.0387) and Kijun-sen (1.0123). Ichimoku indicator lines 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 are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a secondary report on industrial production, and in the US with its most important report on inflation. We are looking forward to the second report and believe that the reaction to it can be very strong. Unless, of course, its actual value does not completely coincide with the forecast.
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.
