EUR/USD 5M
The EUR/USD pair was trading higher on April 8. Thus, the euro has been growing throughout the current week, in which important reports have not been published. This pair's behavior fully meets our expectations. In our fundamental articles, we have repeatedly noticed that we expect a resumption of the global upward trend, as the US economy continues to pump trillions of dollars. Accordingly, supply in the dollar exchange markets increases, but demand does not. After a three-month downward correction, we expect a resumption of the upward track above the 23rd level. As for yesterday's trade deals, nothing interesting happened at night trading, as usual. Signals began to form with the opening of Europe. Unfortunately, most of them turned out to be false yesterday. First, the price rose to the extremum level of 1.1882 and surpassed it, which could be regarded as a buy signal. The price bounced from the resistance level of 1.1891 located literally at 10 points, but this distance was still not enough either to take profit or to set Stop Loss to breakeven. Therefore, you could lose around 9-10 points on the first trade. The pair then settled below the 1.1882 level and this signal also turned out to be false. But this time traders were lucky: the price went down 15 points, which was enough to set Stop Loss to zero. On this order, the short position was closed. This was followed by another rebound from the 1.1882 level, and again this signal turned out to be false and brought a loss of 15 points. A buy signal only appeared on the fourth attempt, which turned out to be correct, and afterwards the price went up a more or less noticeable distance. It was possible to take profits around the 1.1911 level, since Federal Reserve Jerome Powell's speech began around this time. You could have earned around 18 points on this trade. Surpassing the 1.1911 level made it possible for us to remain in long positions. All the most important macroeconomic events of the day are marked with numbers in the chart. "1" is the release of the European Central Bank's monetary policy report, "2" is the report on claims for unemployment benefits, "3" is Powell's speech. As you can see, only Powell's speech had some influence on the course of trading.
EUR/USD 1H
We can see that the EUR/USD pair rebounded from the 1.1861 level three times on the hourly timeframe on Thursday. There was no such level on the 5-minute timeframe yet; it was formed only yesterday. Therefore, it was impossible to use rebounds from it in yesterday's trade. In general, the final, third rebound from 1.1861 pushed the euro to rise by more than 50 points. Thus, the upward trend continues, even though there is no trendline or channel now. Powell's speech created additional pressure on the US dollar. No important reports on Friday. In general, we still recommend trading from important levels and lines that are plotted on the hourly timeframe. The closest important levels are 1.1861, 1.1882 and 1.1911. Signals can be rebounds and once levels and lines are surpassed. Do not forget about placing a Stop Loss order at breakeven if the price moves 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. There is no upward trend line yet, so there is no trading preference. The pair crossed the 1.1911 level at the end of Thursday, which was also a buy signal. Therefore, traders can now buy while aiming for the extremum level of 1.1988.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
Recall that the EUR/USD pair fell by 170 points during the last reporting week (March 23-29). This is already quite a significant drop and we have been recording it for several consecutive weeks. The new Commitment of Traders (COT) report was quite eloquent. A group of non-commercial traders opened 25,000 contracts for shorts and 34 contracts for longs during the reporting week. This means that the net position has decreased by another 25,000, and the bullish mood of the major players continues to weaken. At the moment, the total number of Buy-contracts (longs) that professional players opened is at 195,500, and Sell-contracts (shorts) at 136,000. Although as early as January 5, 2021, that is, three months ago, the numbers were as follows: 226,000 - 82,000. That is, in the three months of the new year, non-commercial traders have increased more than 50,000 contracts for the sale and closed about 30,0000 contracts for the purchase. As the trend changed into a downward trend. According to COT reports, we expected the trend to end last September. The chart clearly shows why. The red and green lines of the first indicator moved away from each other as much as possible in September 2020, which were the harbingers of a trend reversal. However, the dollar's depreciation due to the exorbitant trillions of dollars that was poured into the American economy caused a new rise in the euro, which is again clearly seen in the chart. The net position of non-commercial traders (the second indicator) has been falling since the same September-2020, while the euro's quotes continued to grow at the same time, and these two facts contradict each other. Thus, both the technique in global terms and the COT report are now in favor of continuing the downward movement. The key level is 1.1691.
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.
