EUR/USD 5M
The EUR/USD pair tried to continue moving down, but the level of 1.1772 turned out to be an insurmountable obstacle. There was no important report or news in either the US or the EU on Monday. Therefore, traders had nothing to react to during the day. This explains the absence of a trend during the day. Although, in all fairness, volatility was not the lowest yesterday - about 60 points. For example, it was 30 points last Friday. Thus, traders could open several trading positions on Monday. Let's deal with this. The very first signal was formed right at the opening of the European session. The price has overcome the extremum level of 1.1807, therefore, it was necessary to open short positions. After that, the price has reached the extremum level of 1.1772 and bounced off it. The rebound was not very accurate, so the buy signal was not clear. Nevertheless, short positions should have been closed in a profit of about 20 points around this level. Later, the price returned to the level of 1.1772 and again bounced off it very inaccurately and indistinctly. Nevertheless, the buy signal remained in effect, and in the US trading session, the quotes sharply rose and went back to the level of 1.1807 and even overcame it. Since the price overcame it immediately, long positions should be kept open, and a downward reversal took place near the critical line. The price did not work out the Kijun-sen line itself, so there was no formal rebound. However, traders could see that there was an eloquent reversal, so it was necessary to manually close the long positions. This trade brought about another 35 points in profit. The next sell signal when the price settles below 1.1807 should not have been worked out, since the time was approaching the evening. As a result, in the complete absence of macroeconomic reports, we managed to earn 55 points on Monday.
Overview of the EUR/USD pair. July 20. Preview of the week. Boredom and a passing meeting of the ECB.
Overview of the GBP/USD pair. July 20. Was it a total British error or the most accurate estimate of the British government?
EUR/USD 1H
Another descending trend line has formed for the EUR/USD pair on the hourly timeframe, of which there have already been at least two. However, formally, there is again a downward trend. The trend line is good in any case, as it will be possible to determine the possible end of the downward movement. So far, it continues. The US dollar is still very reluctant to rise in price and there will be no talk of further downward movement until the level of 1.1772 is overcome. On Tuesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1704, 1.1772 and 1.1881, as well as the Senkou Span B (1.1832) and Kijun-sen (1.1808) lines. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. Signals can be rebounds or breakthroughs of these levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price moves 15 points in the right direction. This will protect you against possible losses if the signal turns out to be false. No macroeconomic reports in the European Union and the United States on Tuesday. Therefore, trading is unlikely to be active. Much will depend on technical signals.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair did not gain or lose a single point during the last reporting week (July 6-12). However, the Commitment of Traders (COT) report clearly shows that professional traders continue to build up short positions in the European currency. Let's try to figure out what this means for the euro/dollar pair. A group of non-commercial traders opened 2,300 buy contracts (longs) and 14,000 sell contracts (shorts) during the reporting week. Thus, the net position of the major players has been decreasing for the third or fourth consecutive week. This time it was reduced by almost 12,000 contracts. Thus, the bullish sentiment of traders continues to weaken. However, we would like to remind you that, globally, the upward trend is maintained for the euro/dollar pair, and at this time, a correctional movement is just taking place. Also remember the global fundamental factor, which is the fact that trillions of dollars are being injected into the American economy. It still continues to inflate the US money supply. Therefore, we may again face a paradoxical picture, when the demand for the euro is falling, but the single currency itself is rising. This effect can be achieved if the demand for the dollar falls at a faster rate or the supply of the dollar grows faster. However, it is precisely the latter that has been happening all the time over the past year and a half. We have repeatedly cited data on the money supply in the United States and concluded that for the M1 aggregate it has grown several times over the past year and a half. Thus, formally, the chances of a further decline in the euro have been growing for a month, according to COT reports. And in fact, the upward trend in the EUR/USD pair can resume at any time.
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.
