EUR/USD 5M

The EUR/USD pair was again trading in an outright flat on Tuesday. There was not a single interesting event during the day, so market participants had nothing to react to during the day. And they did not find any other good reasons for active trading. However, we said earlier that in the first three days of the week there may be a flat or the most unattractive movement. This is how it comes out in practice. Today the situation may not differ much from yesterday, as the calendar of events is still empty. This means that volatility may remain low.

Several trading signals were generated yesterday. Everything is around the level of 1.1411. This is a clear sign of a flat, when all the signals of the day are formed around the same level. In principle, even now both linear regression channels eloquently indicate a sideways movement with a slight downward slope. Thus, after the first transaction yesterday (for short positions on the signal of consolidation below the level of 1.1411), it was possible to leave the market and not enter it anymore. Even this single short position could be closed at breakeven, since a few hours after the formation of the sell signal, the price was still moving exactly sideways. Thus, it was not necessary to take unnecessary risks. After an overactive last week, traders clearly needed a rest, and they decided to take advantage of an empty calendar of events in the first three days of this week. A report on inflation in the US will be published on Thursday, so we can hope for an increase in market activity.

COT report

The new Commitment of Traders (COT) report, which was released on Friday, showed an increase in bullish sentiment among a group of professional traders ("non-commercial"). As you can see in the chart above, the green line indicating the "non-commercial" net position continues to be above zero, although in fact it has slightly decreased following the results of the last COT report. However, there is nothing to be surprised about, since Thursday, when the European Central Bank summed up the results of the meeting, and traders were being active, did not get into the latest report. Thus, even without data on Wednesday, Thursday and Friday, we see that the major players are slowly starting to buy the euro currency, and do not continue to sell it. The red and green lines of the first indicator were near the zero level for a long time, which signaled the end of the last trend. And the past trend is the downward trend of 2021. Given that market participants completely ignored the fundamental background of last week, we conclude that the time for long positions on the dollar and short positions on the euro has come to an end. The "sharp start" of the euro also speaks in favor of the beginning of a new upward trend. The EU currency has grown almost out of the blue by 300 points in five days. This is how most trends begin. Of course, nothing prevents traders from winning back this injustice in the new week. Still, the pair should be adjusted from time to time, even if the fundamental background does not speak in favor of this. But for now, we consider this scenario to be an alternative scenario.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. February 9. Christine Lagarde once again confirmed the ECB's passive approach.

Overview of the GBP/USD pair. February 9. 40 out of 54. 10-15 more letters and the issue of a vote of no confidence in Boris Johnson will be put to a vote in Parliament.

Forecast and trading signals for GBP/USD on February 9. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

The euro/dollar pair came as close as possible to the ascending trend line on the hourly timeframe. Therefore, a clear and accurate rebound from it can be a signal for a new round of upward movement. However, we strongly doubt that such a signal can be strong under the current circumstances. Volatility is weak, there is no trend movement, and traders also have a desire to trade. We allocate the following levels for trading on Wednesday – 1.1274, 1.1360, 1.1482, 1.1507, 1.1534, as well as the Senkou Span B (1.1240) and Kijun-sen (1.1376) lines. There are also auxiliary support and resistance levels, but no signals will be formed near them. The lines of the Ichimoku indicator may change their position during the day, which should be taken into account when searching for trading signals. Signals can be "bounces" and "breakthrough" levels - extremes and lines. Do not forget about placing a Stop Loss order at breakeven if the price went in the right direction of 15 points. This will protect you against possible losses if the signal turns out to be false. No important events or publications planned in the United States and the European Union on February 9. Therefore, today we will have to trade again on pure "technique". We believe that volatility will be low again, and the movement will be weak and sideways. You should be careful not to fall into the trap with a flat, as on Monday and Tuesday.

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.