EUR/USD 5M
The EUR/USD pair still traded in a very calm manner on April 14, maybe too much. If a day earlier the inflation report became the driver for the euro/dollar pair, which really shook the markets (not only the currency one), then there was nothing to talk about yesterday. Nothing interesting in fundamental or macroeconomic terms. No important signal generated, therefore, traders who are guided by our recommendations did not have to open positions. It won't take much time to describe yesterday's situation either. The night trading was, as usual, unremarkable. And with the opening of the European trading session, the movement finally died. The volatility of the trading day was about 40 points. Neither Christine Lagarde nor Jerome Powell's speech had any effect on the pair's movement and the mood of market participants. Therefore, it was an absolutely boring day. The pair reached the resistance level of 1.1971 several times, but recall that this level is not an extreme level, therefore it is not a signal generator. Nothing interesting happened during the US session too, and the pair continued to trade as sluggishly.
EUR/USD 1H
We saw that the euro/dollar pair reached the resistance level of 1.1971 on the hourly timeframe on Tuesday, and yesterday, it traded just below it all day and only managed to overcome it in the evening. As we have already said several times, the US inflation report triggered a rather strong movement on Tuesday, but there was no such caliber and importance of news and events on Wednesday. Therefore, the pair continued the same movement that was observed during the four days prior to Tuesday. Even weaker. Several rather important reports will be published in America on Thursday, none of which claim to be of the highest degree of significance. Changes in retail sales, industrial production and the number of new unemployment claims for the respective periods will become known. However, such a macroeconomic background is better than none. Perhaps one of the reports will have an actual value that is very different from the forecast, which will provoke a strong movement. Nothing interesting planned in the European Union today. In general, it is highly likely that the day will be boring again. We still recommend trading from important levels and lines that are indicated on the hourly timeframe. However, as practice shows, the price still needs to get to them. The nearest important levels are 1.1915 and 1.1988, as well as the Kijun-sen line (1.1918) and the trend line. 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.
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 increased by 50 points during the last reporting week (March 30 - April 5). However, what does the Commitment of Traders (COT) reports reveal about the outlook for the currency pair? Let us recall that all the latest reports indicated a significant decrease in the number of buy contracts from the non-commercial group of traders, which, we recall, is the most important category of participants in the foreign exchange market. So, over the past five weeks, non-commercial traders have closed approximately 35,000 Buy contracts (longs) and opened about 44,000 Sell contracts (shorts). Thus, in the last five weeks alone, the net position for professional players has decreased by almost 80,000 contracts. Basically, the second indicator in the chart perfectly shows how the net position of major players has changed recently. This suggests that the mood of professional traders was becoming more bearish or, better to say, less bullish, because the total number of Buy contracts still exceeded the total number of Sell contracts. But if it was a threefold gap in numbers a couple of months ago, now the ratio is 187,000-127,000. Thus, if we only take the COT reports into account, then we can conclude that the upward trend is over and we are waiting for the dollar to strengthen further. The latest COT report, which came out on April 9, has gotten boring. The non-commercial group has closed 7,700 Buy contracts and 6,700 Sell contracts. Thus, the mood of the major players practically did not change over the last reporting week. Take note of the fact that a strong inflation and money supply in the United States can cause the dollar to fall, and this will not even depend on market participants. The money supply will become even bigger, and the dollar supply will increase, so even if traders don't sell the dollar, it can still fall.
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.
