EUR/USD 5M

The EUR/USD pair tried to continue the upward correction on Tuesday, but the upward movement quickly choked near the critical line. As a result, the downward movement resumed in the afternoon, which may become a new round of the downward trend on higher timeframes. Over the past day, there have been macroeconomic publications that had purely theoretical chances for a market reaction to follow them. We are talking about two European reports on industrial production and the ZEW business sentiment index. However, neither the first nor the second report provoked any reaction from traders, although, for example, the ZEW index turned out to be much weaker than forecasts. Thus, at the moment, the pair retains high chances of continuing the formation of a downward trend.

At the same time, we are interested in technical signals and yesterday everything was not easy with them. Firstly, the 1.0990 level and the Kijun-sen line (which was slightly rearranged during the day) were located close enough to each other, but not close enough to be considered a single resistance zone. However, trading signals had to be filtered. For example, the first buy signal, when the price overcame the level of 1.0990, could not be worked out, since the price immediately rested on Kijun-sen. And the rebound from Kijun-sen could not be worked out, as the price immediately hit the level of 1.0990. As a result, it was possible to work out only the last sell signal, when the pair overcame the level of 1.0990. However, it is impossible to call this sell signal strong. It took several hours to form, so it could also be ignored.

COT report:

The new Commitment of Traders (COT) report, which was released on Friday, showed a weakening of the "bullish" mood among professional traders. The first weakening in the last few months. We have already drawn the attention of traders to the fact that major players were actively building up long positions, but at the same time the euro was falling and continues to do so. This time, the "non-commercial" group has opened about 15,000 long positions and 20,500 short positions. Thus, the net position decreased by 5,500. Despite this decrease, the overall mood remains bullish, and the trend is downward. The problem is that the demand among major players for the euro currency may be growing, but at the same time the demand for the US currency is also growing and at a much higher rate. Therefore, we are now dealing not with a classic market situation, when the demand for one currency is growing and the second is declining, but with a situation where the demand is growing for both currencies, but one of them is much faster and stronger. From our point of view, this explains the growth of the dollar in recent weeks on all fronts. Thus, now the data of the COT reports simply do not coincide with what is actually happening with the euro/dollar pair. Therefore, it is impossible to make a forecast for the pair based on COT reports.

We recommend that you familiarize yourself with:

Overview of the EUR/USD pair. March 16. The conflict in Ukraine is fading, but it is unlikely for a long time. Markets are waiting for the Fed meeting.

Overview of the GBP/USD pair. March 16. Boris Johnson: energy independence is the main task of Western countries.

Forecast and trading signals for GBP/USD on March 16. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

It can be seen that the price failed to grow to the trend line on the hourly timeframe, failed to overcome either Kijun-sen or Senkou Span B. Thus, at this time there is a high probability of a resumption of the downward trend, which the downtrend line continues to signal. However, today the market can trade in a very volatile manner, and movements can be unpredictable due to the FOMC meeting. On Wednesday, we allocate the following levels for trading - 1.0729, 1.0806, 1.0901, 1.1122, as well as the Senkou Span B (1.1039) and Kijun-sen (1.0985) 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. There will not be a single important event or publication in the European Union on March 16. Traders will focu on the Federal Reserve meeting, but it will end only late in the evening, when its results will be announced. Thus, the reaction of traders can take all evening, all night and half of Thursday. A report on retail sales will also be published in the United States, but it has very little chance of being worked out.

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.