EUR/USD 5M
The EUR/USD pair decreased its activity again on April 27. If volatility was average on Monday, then it was blatantly low on Tuesday, around 40 points for the entire day (from the low to the high of the day). On the one hand, it is not surprising, since there weren't any macroeconomic reports yesterday, and no fundamental events either. Although, on the other hand, the macroeconomic background, if it has any influence on the pair's movement, is clearly minimal. Thus, we believe that volatility at 40 points is just normal for the pair at this time. Unfortunately, it is impossible to predict exactly what day of the week this volatility will be, so you just need to worry about such days. Neither bulls nor bears had any initiative on Tuesday. Take note that the upward trend persists on a more global scale, which has been observed for more than three weeks. The bears are now unable to even correct by a couple of points by 100-150. Thus, it is possible that today's Federal Reserve meeting will make adjustments. In the meantime, let's analyze yesterday's deals. In principle, there were very few of them and none of them brought the proper profit. Again, not surprising! What can you expect if the pair found it difficult to surpass a distance of 40 points in half during the day? The first signal formed at the beginning of the European session - a rebound from the extremum level of 1.2076, afterwards the quotes fell by as much as 13 points and could not work out even the nearest target - the Kijun-sen line (1.2055). The next signal was formed when the same 1.2076 level was overcome from the bottom up. And again, after its formation, the price went up by an unrealistic 12 points. Thus, according to these two signals, traders could lose around 15 points. All subsequent signals from the 1.2076 level should not have been considered. And in any case, it became clear that the markets were not set to work actively on the second trading day of the week.
EUR/USD 1H
The correction continues on the hourly timeframe, but the bears failed to settle below the critical line. Thus, the total size of the last round of correction was 60 points. It was for such values that the EUR/USD pair corrected throughout the entire upward trend, which began on March 31. Thus, the upward movement can resume now, unfortunately, there was no clear rebound from the Kijun-sen line. However, one should not relax, because the results of the two-day Fed meeting will be summed up today in the US. The markets can be quite active in the evening and during the day too. Thus, it is generally not recommended to trade in the evening. And you should be careful during the day, as the markets may start trading "on expectations" of certain decisions and statements of Fed Chairman Jerome Powell. We still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels are 1.2076, 1.2113 and 1.2145, as well as the Kijun-sen line (1.2055). Signals can be rebounds or breakthroughs of these levels and lines. 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. On Wednesday, as already mentioned, America is set to summarize the results of the Fed meeting and Powell's press conference. The news calendar does not contain anything else interesting.
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 120 points during the last reporting week (April 13-19). Notably, major players have actively been reducing buy contracts (longs) and opened sell contracts (shorts) instead. In the "non-commercial" group, the total number of Buy-positions has decreased from 240,000 to 190,000 and the number of Sell-positions has grown from 76,000 to 127,000 since the beginning of February. Therefore, it is evident that the bullish sentiment has been waning down, however, the sentiment is still bullish, and in the last two weeks it has begun to strengthen again. Recall that the Commitment of Traders (COT) reports has signalled the end of the upward trend since last September, when the lines of the first indicator moved as far apart as possible. However, we still remind you of the fact that money is still being injected into the US economy. Simply put, big players can trade as they please, in any direction, buy any currency, but if at the same time the money supply of dollars increases by trillions, the influence of the players themselves on the foreign exchange market becomes less. Accordingly, now the factor of an increasing money supply in the United States is in first place, not the behavior of non-commercial and commercial traders in the foreign exchange market. Professional traders opened 6,200 buy contracts (longs) and closed 8,500 sell contracts (shorts) during the last reporting week. Thus, their net position increased by 14,700 contracts. And so it is possible that the major players realized that the euro would still rise, and the dollar would fall, and so they decided to trade with the trend themselves. If earlier it was the big players who formed the trend, now they follow the trend. In general, from our perspective, there is a very high likelihood that the euro will keep growing in 2021.
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.
