EUR/USD 5M
The EUR/USD pair traded very calmly on April 12, which is not surprising at all, given that there was no macroeconomic and fundamental background on Monday. And so the slight downward movement in the first half of the day was replaced by an equally light upward movement in the afternoon. The bulls managed to return the pair to the 1.1911 level, which is an extreme level and has already corrected to the 1.1915 level. The price rebounded from this level three times already, so it is strong. In general, the upward trend continues, but we continue to expect an upward movement. The fact that the price has reached the 1.1915 level three times and rebounded three times by no more than 50 points suggests that the bulls can still take this level. And so we expect the pair to surpass it in the near future. As for the trading signals. No signal generated on the 5-minute timeframe during the day. The quotes slightly moved lower during the Asian session. And since it did not reach the 1.1861 level during the European session, in order to form a signal, it turned upward and began a new round of upward movement. The resistance level at 1.1891 and extreme level at 1.1911 were reached, but a buy signal was not formed during the day. Upon reaching the 1.1911 level, an outright flat began, as traders did not find any reason to be active during the US session. As a result, there was not a single reason to open a deal during the day.
EUR/USD 1H
We see that the euro/dollar pair tried to continue the upward trend and surpass the 1.1915 level (adjusted) on the hourly timeframe on Monday, but eventually it failed. The pair did not receive any new growth factors on Monday. And so we continue to believe that the main factor in the upward movement is the oversaturation of the American economy, which increases the supply in the dollar markets and reduces its rate. The US is set to publish an important report on inflation on Tuesday, which could rise to 2.4% y/y. It is very difficult to predict how traders will react to this report, so when it comes out, the main thing is to be cautious. Everything will depend not only on the very fact that inflation might have accelerated, but also whether the forecast is reached. The pair can move in any direction under the influence of inflation. Thus, we still recommend trading from important levels and lines that are plotted on the hourly timeframe. The nearest important levels are 1.1861 and 1.1915, as well as the Kijun-sen line (1.1864). Signals can be rebounds and once levels and lines are surpassed. 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.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
Recall that the EUR/USD pair increased by 50 points during the last reporting week (March 30 - April 5). However, what does the Commitment of Traders (COT) reports reveal about the outlook for the currency pair? Let us recall that all the latest reports indicated a significant decrease in the number of buy contracts from the non-commercial group of traders, which, we recall, is the most important category of participants in the foreign exchange market. So, over the past five weeks, non-commercial traders have closed approximately 35,000 Buy contracts (longs) and opened about 44,000 Sell contracts (shorts). Thus, in the last five weeks alone, the net position for professional players has decreased by almost 80,000 contracts. Basically, the second indicator in the chart perfectly shows how the net position of major players has changed recently. This suggests that the mood of professional traders was becoming more bearish or, better to say, less bullish, because the total number of Buy contracts still exceeded the total number of Sell contracts. But if it was a threefold gap in numbers a couple of months ago, now the ratio is 187,000-127,000. Thus, if we only take the COT reports into account, then we can conclude that the upward trend is over and we are waiting for the dollar to strengthen further. The latest COT report, which came out on April 9, has gotten boring. The non-commercial group has closed 7,700 Buy contracts and 6,700 Sell contracts. Thus, the mood of the major players practically did not change over the last reporting week. Take note of the fact that a strong inflation and money supply in the United States can cause the dollar to fall, and this will not even depend on market participants. The money supply will become even bigger, and the dollar supply will increase, so even if traders don't sell the dollar, it can still fall.
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.
