EUR/USD 5M

The EUR/USD pair fell by almost 100 points on Wednesday. Thus, the euro's collapse continues, and we continue to pay attention to the fact that there were no clear reasons for such a fall. In our fundamental articles, we have already said that the downward trend has been maintained for a long time, so in general, the new decline is not surprising. The only surprising thing is that it happened on Tuesday and Wednesday, when there wasn't any important report or event. What could traders pay attention to yesterday? The index of business activity in the CONSTRUCTION sector? On retail sales, which usually provoke a market reaction of 20 points? No, the market is simply tired of stagnation in one place after a two-month pause. The bears realized that the bulls were not going to seize the initiative and went on the offensive. This is the only logical explanation for what happened in the last two trading days.

As for trading signals, there were none on Wednesday. Recall that this week the pair managed to update its 20-year lows, so there are simply no important levels at the current price values. Price hasn't been here in over 20 years! Thus, during the day, the pair did not even approach any important line (all Ichimoku indicator lines are much higher), or any important level.

COT report:

The latest Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that they showed a blatant bullish mood of professional players, but at the same time, the euro was falling at the same time. At this time, the situation has changed a bit, and not in favor of the euro. If earlier the mood was bullish, but the euro was falling, now the mood has become bearish and... the euro is falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions decreased by 6,100, and the number of shorts in the non-commercial group decreased by 11,100. Accordingly, the net position slightly increased by 5,000 contracts. However, the mood of major players still remains bearish. From our point of view, this fact very eloquently indicates that at this time even professional traders do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 11,000. Therefore, we can state that not only the demand for the US dollar remains high, but also the demand for the euro is quite low. This may lead to a new, even greater fall of the euro. In principle, over the past few months or even more, the euro has not been able to show even a tangible correction, not to mention something more. The highest upward movement was about 400 points.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. July 7. The euro continues to fall due to geopolitics.

Overview of the GBP/USD pair. July 7. Boris Johnson's henchmen are fleeing the government because of another scandal.

Forecast and trading signals for GBP/USD on July 7. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

A downward trend is clearly visible on the hourly timeframe, and in the last few days it has almost collapsed. We have already said more than once that the euro may become cheaper at least until the end of this year, as the Federal Reserve's actions provoke an increase in demand for the US dollar. And the geopolitical situation in Ukraine puts the entire European economy at serious risk. We highlight the following levels for trading on Thursday - 1.0340-1.0366, 1.0485, as well as Senkou Span B (1.0498) and Kijun-sen (1.0324) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No major events are scheduled for July 7 in the EU, while the US will publish a relatively important ADP report on changes in the number of employees in the private sector. If the deviation from the predicted value is significant, this may cause a market reaction. But does the market really want to pay attention to "macroeconomics" at all right now?

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.