EUR/USD 5M
The EUR / USD pair traded more calmly on May 13 than the day before, however, the main movement of the pair on Wednesday was provoked by the US inflation report, for which market participants, as it turned out, were absolutely not ready. Therefore, we saw a "roller coaster". However, volatility dropped yesterday, and much less macroeconomic reports were released during the day. Nevertheless, it is clearly seen that the pair did not have one definite direction of movement on the 5-minute timeframe over the past day. The pair changed the direction of movement twice, and each next round of movement was commensurate with the previous one. That is, these were not reversals for a banal correction or pullback. But what influenced the actions of traders during the day is not clear. More precisely, it is better to say, foundation and macroeconomics definitely did not play a part, since there were very few of them, and their degree of importance left much to be desired. Consequently, most likely, the markets continued to trade under the impression of the day before yesterday's inflation report, as well as on the basis of technical signals. And not on the 5-minute TF.
However, let's start examining yesterday using the 5-minute TF. The first signal was formed at the very beginning of the European trading session - a rebound from the extremum level of 1.2076. After forming this signal, the price went up 24 points, which was enough to set Stop Loss to breakeven, but not to make a profit on a long position. The nearest level 1.2113 was not worked out. Next, a sell signal was formed to surpass the same level of 1.2076, but this time from top to bottom. And again the pair went down a sufficient distance to set Stop Loss to zero, but not to take profit. Thus, both signals are recognized as false, therefore, the third and fourth signals (also surpassing the level of 1.2076) should not have been worked out. So traders did not receive any profit or loss on the EUR / USD pair yesterday. There are such days too. As for macroeconomic data, the report on claims for unemployment benefits in the US and the producer price index, which are marked with the number "1" in the chart, were more or less noteworthy. As you can see, the pair went up by as much as 14 points after these reports were published, that is, in fact, there was no reaction.
EUR/USD 1H
On the hourly timeframe, you can clearly see what is not on the 5-minute timeframe. Namely a rebound from the upward trend line. Thus, with a high degree of probability, the upward trend will resume, at least this is the conclusion that can be drawn based on yesterday's trade. In any case, until the price settles below this trend line, it is still too early to talk about a trend change. In the near future, we expect the pair to return to the level of 1.2175, which is the last local high. Today, we still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels at this time are 1.198, 1.2113 and 1.2145, as well as the Senkou Span B (1.2080) and Kijun-sen (1.2116) lines. Caution! The Ichimoku indicator lines can move during the day, which should be taken into account. 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 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. No major events in the European Union scheduled for Friday. Meanwhile, America will release reports on retail trade, industrial production and a consumer sentiment index from the University of Michigan.
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 20 points during the last reporting week (April 27-May 3). During the same time, a group of non-commercial traders opened 7,000 buy contracts and 6,000 sell contracts. Thus, the net position increased by only 1,000 contracts over the reporting week, which is very, very little for the euro. Thus, we can say that the new Commitment of Traders (COT) report did not record any changes. But in general, the situation with the European currency remains rather strange. One might say that the upward trend in the euro has resumed, but professional traders do not observe an increase in long positions. The first indicator in the chart perfectly shows this. Moreover, according to the COT reports, the upward trend is drying up and losing its bullish momentum since last September. However, in fact, all this time, the upward movement is still present, so the data from the COT reports now does not quite accurately reflect what is happening on the market. The second indicator shows that the net position of non-commercial traders has been falling since last September. But if major players reduce the number of euro longs and increase the number of shorts, then the euro should decline. But in fact, it is not decreasing. We have only one explanation for this: the continued growth of the US money supply. Since the number of dollars is constantly growing, no matter what the actions of large players in the foreign exchange market, they simply cannot block the actions of the Federal Reserve. The dollar supply is constantly increasing, so even if large players are also constantly selling euros, the euro would still rise. Such is the paradox, but over the past year we have seen many paradoxes and illogicalities. One has only to look at the chart of the movement of the pound...
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.
