EUR/USD 5M
The EUR/USD pair tried to correct once more last Friday, but then resumed the downward trend. At least that's what it looks like now. The euro rose by about 125 points during the day, but lost the same amount in the afternoon. The probability of another one or two turns of the upward movement remains on the hourly time frame, but the probability of the resumption of the downward trend is higher. Thus, we can only once again state the fact that the euro cannot even correct normally against the dollar, not to mention something more. To be fair, the US dollar had grounds for growth on Friday. And there were illusory reasons for the fall. Macroeconomic statistics in the United States turned out to be weaker than forecasts, but at the same time not so much as to provoke a fall of 50-60 points. But Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole symposium was unambiguously in favor of the dollar, as Powell's tone was still hawkish. We still believe that the US dollar will appreciate in the medium term.
There were plenty of trading signals on Friday. The very first signal - a rebound from the critical line - could be worked out. The short position was closed by Stop Loss at breakeven. This was followed by a buy signal near Kijun-sen. After that, the pair went up to the level of 1.0019 and rebounded from it. Profit 24 points and opening short positions. Short positions closed at breakeven on Stop Loss as the price moved down 15 points. Further, a new buy signal in the form of overcoming the level of 1.0019 and hitting 1.0072. Another 30 points profit. Then Powell's speech began, and traders could no longer take risks and leave the market. In any case, the day ended in good profit. If they continued to trade, they could get about 100 more points, as the signals continued to form very good ones.
COT report
The Commitment of Traders (COT) reports on the euro in the last few months clearly reflect what is happening in the euro/dollar pair. For most of 2022, they showed an openly bullish mood of commercial players, but at the same time, the euro fell steadily at the same time. At this time, the situation is different, but it is NOT in favor of the euro. If earlier the mood was bullish, and the euro was falling, now the mood is 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. The number of long positions for the non-commercial group increased by 11,600, and the number of shorts increased by 12,900 during the reporting week. Accordingly, the net position increased by about 1,300 contracts. After several weeks of weak growth, the decline in this indicator resumed, and the mood of major players remains bearish. From our point of view, this fact very eloquently indicates that at this time even professional traders still do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 44,000. 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. The fact that major players are in no hurry to buy the euro may lead to a new, even greater fall. Over the past six months or a year, the euro has not been able to show even a tangible correction, not to mention something more.
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Forecast and trading signals for GBP/USD on August 29. Detailed analysis of the movement of the pair and trading transactions.
EUR/USD 1H
The pair has consolidated above the trend line on the hourly timeframe, but still does not leave the feeling that the downward trend continues. The euro fell seriously on Friday, so the likelihood of a resumption of the downward march remains high. All factors still speak in favor of the dollar's succeeding growth. We highlight the following levels for trading on Monday - 0.9900, 1.0019, 1.0072, 1.0124, 1.0195, 1.0269, as well as Senkou Span B (1.0132) and Kijun-sen (0.9994). There is not a single level below the level of 0.9900, so there is simply nothing to trade there. 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. No important events or publications are scheduled in the European Union and the United States on August 29, so low volatility may be observed during the day. At the same time, no one can forbid traders to trade actively.
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.
