EUR/USD 5M
Yesterday, the euro/dollar pair corrected to the Senkou Span B line, after which it resumed its downward movement. The descending channel has been reshaped and now has a wider view and a smaller angle of inclination. The price continues to be below both lines of the Ichimoku indicator, so everything now speaks in favor of a further fall in quotes. We would like to note the following: this week there is an extremely small amount of macroeconomic statistics and important fundamental events. But even in this state of affairs, the euro can't do anything against the dollar. It would seem to be a great opportunity to at least adjust, but no! The pair slowly and inexorably continues to slide down. There were even grounds for a small increase in the euro. The EU industrial production report turned out to be better than expected, but even this did not make traders buy rather than sell. Everything remains as it was!
There was complete boredom with trading signals for three consecutive days. Not a single signal was formed on Wednesday, and the price did not even approach any important level or line during the day. Therefore, traders did not have to be active yesterday.
COT report:
The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. October 13. Emergency G-7 meeting and sixth Ramstein meeting.
Overview of the GBP/USD pair. October 13. Bank of England: QT program postponed, asset purchases will continue at a double rate.
Forecast and trading signals for GBP/USD on October 13. Detailed analysis of the movement of the pair and trading transactions.
EUR/USD 1H
The downward trend has resumed on the hourly timeframe as the downward channel has taken on a new look. The pair renewed its local low yesterday and continues to be very close to 20-year lows. Since we still do not observe any serious news in support of the euro, most likely, the fall in quotes will continue. We highlight the following levels for trading on Thursday - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9788). 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. There will be no important events and reports in the European Union. But the most important report of this week will be published in the US - inflation for September. As we said in our fundamental articles, we do not believe that inflation will somehow affect the outcome of the next Federal Reserve meeting, increasing or decreasing the likelihood of a 0.75% rate hike. However, today the market reaction to this report may follow. And the stronger the actual value will not correspond to the forecast, the stronger the reaction can be.
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.
