empty
 
 

Forex Analysis & Reviews: Outlook and trading signals for EUR/USD on December 5. COT report. Analysis of market situation. Euro at highs!
time 05.12.2022 07:18 AM
time Relevance up to, 06.12.2022 02:05 AM

M5 chart of EUR/USD

This image is no longer relevant

On Friday, EUR/USD went upwards again by the end of the day. This time the overall growth was not so strong since important reports were published in America, which were definitely in favor of the US dollar. The greenback grew for a while after the reports, but in the evening the euro started rising again and offset all the losses after the US data. If the dollar grew quite naturally after the Non-farms and the unemployment, then the euro's subsequent growth raised some questions. However, we could get used to this situation. The euro has been growing for quite a long time without any particular reason, so we have only to work out these trends and quite volatile movements. Separately, the macroeconomic statistics from across the ocean was quite strong, so the market should have been selling the pair, not buying it.

The pair generated unfortunate signals on Friday. Before the US reports were released the pair was in a flat, and after it EUR/USD plunged so fast that there was no chance to work out this movement. That is why the first signal appeared in the middle of the US trading session, when the price rebounded from 1.0485. After that the pair went down about 35 pips, so traders could place the Stop Loss to Breakeven. The next buy signal was near the same level of 1.0485, but it appeared too late, so traders could not use it. But if some traders opened a long position, they definitely made a profit.

COT report

This image is no longer relevant

COT reports on EUR/USD have puzzled traders through most of 2022. Half of the year, COT reports indicated clear-cut bullish sentiment among large market makers while the single European currency was extending its weakness. For a few months, the reports showed a bearish sentiment and the euro was also trading lower. Now sentiment of non-commercial traders is turning bullish again, and the euro is rising, but it is a rather high net position that allows us to assume that the upward movement will end soon. During the reporting week, the number of Buy contracts for the Non-commercial group increased by 4,700, and the number of short contracts rose by 4,600. Accordingly, the net position grew by about 100 contracts. The European currency has been rising in recent weeks, which is already in line with the readings of the COT reports. At the same time, we believe that the US currency may still regain its footing amid the same geopolitics or due to the lack of fundamentals for further growth of the euro. The green and red lines of the first indicator moved far away from each other, which could mean the end of the uptrend (!!!) (which, in fact, never happened).

The number of BUY contracts is higher than the number of SELL contracts for non-commercial traders by 133,000. Thus, the net position of the "non-commercial" group may continue to rise further, but this may not trigger a similar rise in the euro. If we look at the overall numbers of open long and short contracts for all categories of traders, there are 33,000 more sell contracts (755,000 vs. 723,000).

H1 chart of EUR/USD

This image is no longer relevant

On the one-hour chart, EUR/USD continues to show absolutely erratic movements and Friday was just another proof of this. After the ascending trend line was broken, the downward movement did not start. After Federal Reserve Chairman Jerome Powell's speech, the pair returned to its local peaks for absolutely no reason and then it did not even fall after the strong US data. Therefore, movements can only be analyzed using technique. On Monday, the pair may trade at the following levels: 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, and also Senkou Span B (1.0359) and Kijun Sen (1.0414). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal. On December 1, the EU will publish retail sales and business activity reports in the service sector. In America, the ISM Services Business Activity Index will be released, which is the most important report of the day.

What we see on the trading charts:

Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals.

The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines.

Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals.

Yellow lines are trend lines, trend channels, and any other technical patterns.

Indicator 1 on the COT charts reflects the net position size of each category of traders.

Indicator 2 on the COT charts reflects the net position size for the non-commercial group.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2023
EURUSD
Euro vs US Dollar
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Start trade
Start trade

InstaForex分析评论将让您充分了解市场趋势! 作为InstaForex的客户,您将获得大量的免费服务以实现有效的交易。

  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST
  • Chancy Deposit
    Deposit your account with $3,000 and get $1000 more!
    In February we raffle $1000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST
  • Trade Wise, Win Device
    Top up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.
    JOIN CONTEST
  • 100% Bonus
    Your unique opportunity to get a 100% bonus on your deposit
    GET BONUS
  • 55% Bonus
    Apply for a 55% bonus on your every deposit
    GET BONUS
  • 30% Bonus
    Receive a 30% bonus every time you top up your account
    GET BONUS

Recommended Stories

EUR/USD heading towards 1.0500

The EUR/USD pair dropped below the uptrend line and below the 1.0771 former low which represented downside obstacles, signaling that the upward movement ended and that we may have

Ralph Shedler 20:30 2023-02-06 UTC+2

AUD/USD outlook for February 6, 2023

A strong report from the U.S. Department of Labor last Friday contributed to the sharp strengthening of the U.S. dollar. Its DXY index gained 2%, while all major currencies fell

Jurij Tolin 14:12 2023-02-06 UTC+2

Trading tips for USD/CHF

The plan presented last January 2 was to place a new set of buy limits in USD/CHF. The aim was to increase prices, which is exactly what happened when

Andrey Shevchenko 11:09 2023-02-06 UTC+2

Trading tips for EUR/USD

The plan presented last January 2 aims to decrease EUR/USD prices according to this scenario: That is exactly what happened on Friday, after the US reported stronger-than-expected data

Andrey Shevchenko 11:08 2023-02-06 UTC+2

Trading tips for AUD/CAD

The plan presented last January 25 talked about setting a new grid of sell limits in AUD/CAD. The target was to decrease the prices, which is exactly what happened

Andrey Shevchenko 11:06 2023-02-06 UTC+2

Trading tips for USD/JPY

The previous trading plan in USD/JPY talked about increasing the price of the pair, which is exactly what happened on Friday, after the US released better-than-expected data on the labor

Andrey Shevchenko 11:06 2023-02-06 UTC+2

EUR/USD and GBP/USD trading plan for beginners on February 6, 2023

The EURUSD currency pair accelerated its decline due to the strong information and news background. As a result, the quote not only reached the level of 1.0800, it managed

Gven Podolsky 10:25 2023-02-06 UTC+2

Trading plan for US dollar index on February 03, 2023

The US dollar index finally bottomed at 100.51 over the last week as the bulls staged an impressive rally towards 102.80 post-NFPs last Friday. The index is currently trading around

Oscar Ton 10:24 2023-02-06 UTC+2

Trading plan for EURUSD on February 06, 2023

EURUSD finally reversed sharply from the 1.1025 high, the supposed resistance zone, on Friday. The single currency pair dragged through fresh lows at 1.0780 on Monday and is seen

Oscar Ton 09:45 2023-02-06 UTC+2

Outlook and trading signals for GBP/USD on February 6. COT report. USD determines its future

Analysis of GBP/USD, 5-minute chart On Friday, the pound/dollar pair slumped. However, judging by the fundamental and macroeconomic data received last week, the situation could hardly be the opposite. Notably

Paolo Greco 07:49 2023-02-06 UTC+2
现在无法通话?
提出您的问题,用 在线帮助.