EUR/USD 5M
The volatility for the EUR/USD pair was low again during the penultimate trading day of the week, but clearly better than on most days, amounting to 67 points. Thus, the move allowed traders to trade and trade profitably on Thursday. Most of the trading signals were clear and accurate, so it turned out to be profitable. Basically, this is what we have been constantly talking about in recent months. If the pair passes 30-40 points a day, then it is extremely difficult to trade profitably. As soon as normal movements begin, good signals immediately appear. The only thing that traders should have taken into account yesterday was a fairly large number of macroeconomic reports. However, all of them were not of the first degree of importance. Let's get started with deals. The first buy signal was formed even before the opening of the European trading session. However, a long position should have been opened anyway, since at the time of the opening of Europe the quotes were only a few points above the level of 1.1704. Further, an upward movement began, during which the price almost reached the critical line, but still did not work it out. In the interval between these two events, reports on business activity in the European Union were published (the number "1" in the chart). Both in the service sector and in the manufacturing sector, business activity turned out to be much worse than forecasts and previous values, but this did not prevent the euro from rising. Ultimately, the quotes crossed the Kijun-sen line and reached the extremum level of 1.1750, from which they rebounded, which was a signal to sell. Therefore, at this point, it was necessary to close a long position (the profit was about 30 points) and open a short position. Around the same time, data on claims for unemployment benefits in the United States were published (figure "2" in the chart), as well as indexes of business activity in the United States (figure "3" in the chart). The first report had no effect on the pair's movement. Business activity reports - too, as deviations of actual values from forecasts were minimal. Thus, macroeconomic statistics had no effect on the pair's movement. You could get about 10 more points of profit on a short position.
Overview of the EUR/USD pair. September 24. "Walk-through" meeting of the FRS. Minimal reaction of traders.
Overview of the GBP/USD pair. September 24. Pound gained support amid the growing hawkish sentiment of the Bank of England.
EUR/USD 1H
You see on the hourly timeframe that the euro/dollar pair quickly "moved away" from the Federal Reserve meeting, and the US dollar fell against the euro. The upward movement did not reach the area above the level of 1.1750, and the downward trend for the pair persists, since the downtrend line remains relevant. So for now, the pair's decline looks more preferable, but only in the short term. In the long term, we continue to expect the upward trend to resume. On Friday, we continue to draw the attention of traders to important levels and lines - 1.1612, 1.1666, 1.1704, 1.1750, 1.1805, as well as the Senkou Span B (1.1775) and Kijun-sen (1 , 1735). The Ichimoku indicator lines can change their position 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. The only important event on September 24 that can be singled out is the speech of Fed Chairman Jerome Powell. True, everything the markets wanted to know was already reported by Powell on Wednesday night. It is unlikely that in two days, one received new information regarding monetary policy and the timing of the QE roll-off. However, this is a potentially important event that could affect the movement of the pair.
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 (September 7-13). The latest Commitment of Traders (COT) report showed minimal changes in the mood of the "non-commercial" group of traders, which, we recall, is the most important group of traders. During the reporting week, professional traders closed 4,000 contracts for buying (longs) and also the same number for selling (shorts). Thus, the net position has not changed, as well as the mood of the major players. But serious changes followed in the "commercial" group, where traders immediately closed 27,000 buy contracts (longs) and 36,000 sell contracts (shorts). These data are less important, but still the difference is striking. Returning to commercial traders, the total number of buy contracts (longs) they now have is 187.5 thousand, and sell contracts at 160 thousand. Thus, the bullish mood still persists, but it has significantly weakened in recent months. Therefore, we can say that the euro/dollar pair is currently teetering on the edge of an abyss called a "new downward trend". In principle, we have already said that the critical point for maintaining the long-term upward trend, which began in March 2020, is the level of 1.1700. If the bears manage to overcome it after a 9-month ordeal, then the chances of further strengthening of the US currency will increase sharply. Therefore, this issue may be resolved in the coming days. On the other hand, much will depend on the actions of the Fed not only at the next meeting, but also in the near future. If the markets do not find evidence of readiness to curtail QE, then the US dollar will lose its trump card in the confrontation with the euro currency.
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