EUR/USD 5M
The EUR/USD pair showed quite good activity during the second trading day of the week, which was not based on macroeconomic statistics or any fundamental events. However, we have already talked about this several times before. The pair continues to trade more or less volatile for 3 out of 5 trading days on average. Thus, yesterday was one of such volatile days, although the pair passed about 70 points in total from the lowest to the high, so the concept of volatile in this case is very stretched. Anyway, the quotes managed to decrease by 50 points during the day, and then rise by 70. Thus, at the end of the day, the pair remained approximately where it started. From the macroeconomic reports, we can only highlight the report on orders for durable goods in the United States, the volume of which grew much less in June than traders expected to see, as well as an indicator of consumer confidence, which remained virtually unchanged compared to the previous period. The first report is indicated in the chart by the number "1", the second-by the number "2". As you can see, all the main movements of the euro/dollar pair occurred before these data were published. Thus, as we said yesterday, there was no reaction to them. Now, as for trading signals and transactions. There were few signals on Tuesday. The first one was formed when the price overcame the critical line in the European trading session, but it turned out to be false, since the price managed to go down only 11 points after its formation, which was not enough even to set the Stop Loss to breakeven. The second buy signal when the price settled above the critical line and it turned out to be more correct and brought about 20 points of profit. However, the first transaction resulted in a loss of 13 points, so the overall result of the day is not particularly impressive. However, we remind you once again that when a pair passes 40-50 points in a day with grief in half, it will not be possible to earn much on such a movement in any case. In addition, such a weak movement means that the pair can often cross different lines and levels, which is fraught with false signals. Thus, 7 points of profit on such movements is still very good for intraday trading.
EUR/USD 1H
The downward trend was canceled for the euro/dollar pair on the hourly timeframe, as the price settled above the descending trend line. The price has once again increased to the Senkou Span B line and seems to have overcome it, which opens up further prospects for moving up. However, taking into account the general low volatility, which has been maintained for more than two weeks, we can't count on a strong growth in quotes right now. On Wednesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1704, 1.1756 and 1.1881, as well as the Senkou Span B(1.1815) and Kijun-sen(1.1791) lines. The lines of the Ichimoku indicator can move during the day, which should be taken into account when searching 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. The only event of the day will be the Federal Reserve meeting and the announcement of its results. We would like to write that this will be a very important event that will certainly cause a strong movement of the pair, but there is a high probability that the meeting will be a passing one, and the markets will not hear anything interesting for themselves at Fed Chairman Jerome Powell's press conference. In any case, this event is scheduled for late evening, so the pair may continue to move very sluggishly during the day.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair fell by 60 points during the last reporting week (July 13-19). In recent weeks, major players have continued to reduce the number of Buy contracts (longs) and increase sell contracts (shorts). This is clearly seen in the first indicator. The green line (net position of the "non-commercial" group) continues to decline, while the red line (net position of the "commercial" group) continues to grow. Recall that when these two lines move towards each other, it means that the current trend is coming to an end or has already ended. However, we have already repeatedly drawn your attention to the fact that the global injection of cash into the US economy continues, as the Federal Reserve has repeatedly stated. Thus, a rather paradoxical situation turns out: professional traders are selling the euro, but at the same time it is getting very weak and has excellent chances of resuming the upward trend. This is because the money supply in the United States continues to increase and the dollar is now also depreciating due to high inflation and high supply in the foreign exchange market. It turns out to be a situation in which the euro is getting cheaper mostly due to the fact that players are selling it, and the dollar is getting cheaper because of the actions of the Fed and the US government. Consequently, as a result, that currency falls, the rate of reduction in price of which is higher. So far, this is the euro currency. But its decline is very weak. During the reporting week, non-commercial traders opened another 7,000 contracts to sell and closed 5,600 contracts to buy. Thus, their net position decreased by another 12.6 thousand contracts, and the mood became even less bullish. The total number of buy contracts from the non-commercial group is already 210 thousand, and for sale - 162 thousand. More recently, the gap was twofold.
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.
The material has been provided by InstaForex Company - www.instaforex.com