EUR/USD 5M

The EUR/USD pair could not maintain a positive attitude for itself on Tuesday. In the first half of the first half of the day, the pair was still trying to continue the upward correction, but the price fell closer to the US trading session. We cannot conclude that the new collapse was associated with any macroeconomic event. Most likely, as it has been recently, the geopolitical background has influenced. The key news of recent days was the first round of negotiations between the Ukrainian and Russian sides, which did not end with anything positive, as well as Moscow's statement that it was going to continue "the military operation until the goals were achieved." Thus, the market perceived this news as a new escalation of the conflict and again began to get rid of the most risky currencies.

As for trading signals, there were several of them on Tuesday, and they were very, very good. It all started with a rebound from the 1.1234 level and the critical line. There were even two of them, so traders had two attempts to open short positions. Subsequently, the price did nothing but fall, making only a small stop near the level of 1.1166, from which it initially bounced. Yesterday, long positions should not have been considered, since geopolitics clearly spoke of a new fall in the euro and the pound. More precisely, about the new strengthening of the US currency. Thus, the buy signal near the 1.1166 level should have been ignored. However, the first short position should have been closed near this level. The next sell signal again made it possible to open shorts, which also turned out to be profitable, as the price went down another 50 points and only stopped around 1.1105. Thus, two trades are profitable ones.

COT report:

The new Commitment of Traders (COT) report, which was released on Friday, showed a new strengthening of the bullish mood among professional traders. This time, the "non-commercial" group closed about 17,000 contracts for short positions on euros and 5,500 long positions. Thus, the net position increased by 12,000, which is clearly visible on the second indicator in the chart above. The total number of long positions exceeds the number of short positions by 60,000, so now we can really say that a new upward trend is beginning to form. It would be possible to say, if not for one "but". The European currency is not growing. It does not rise even at a time when there seem to be "corrective" grounds for this. Recall that the euro currency has been getting cheaper in one way or another for 14 months. It does not grow even when the participants of the foreign exchange market themselves increase their long positions. It seems that geopolitics really remains in the foreground, so COT reports in some way lose their significance. Remember, when the Federal Reserve was actively pumping its economy with dollars, the data from the COT reports also did not always coincide with the trend in the market itself. This was because the money supply in the US was growing very fast, so it was not always important what actions the players in the market were taking. The "Fed factor" was more important. And now the factor of geopolitics is more important.

We recommend that you familiarize yourself with:

Overview of the EUR/USD pair. March 2. The euro currency has flown down again, the "swing" continues.

Overview of the GBP/USD pair. March 2. Has the pound calmed down, or is it a lull before a new storm?

Forecast and trading signals for GBP/USD on March 2. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

There is a downward trend on the hourly timeframe. It remains, of course, due to the strong geopolitical background that supports the dollar. Nevertheless, a fall in the medium term remains the most likely development of events. There is a trend line now, so consolidating above it can signal that the pair's decline will stop for a while. But at this time, the price is very far from it. On Wednesday, we allocate the following levels for trading – 1.0990, 1.1105, 1.1166, 1.1234, 1.1274, 1.1321, 1.1391, as well as the Senkou Span B (1.1251) and Kijun-sen (1.1221) lines. There are also 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. A fairly important inflation report for February will be published in the European Union on March 2, and a speech by Federal Reserve Chairman Jerome Powell will be held in the United States. These two events can provoke a market reaction, but only if they are not blocked by the geopolitical background.

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.