EUR/USD 5M
The EUR/USD pair was reluctant on April 29. There was a surge in volatility the day before yesterday evening, which pushed the pair to rise by 80 points. The quotes began to correct after such a strong movement. And it was in the correctional scenario that the entire penultimate trading day of the week passed. As you understand, it was problematic to make money on a blatant correction, and even with low volatility. Three of the last five trading days passed without a definite direction of movement and with low volatility (on Wednesday, too, with the exception of a few evening hours, when the results of the Federal Reserve meeting were summed up). And so few signals were formed on the 5-minute timeframe again, and they were not very accurate and profitable. By and large, there was only one signal. The pair dropped to the extremum level of 1.2113 during the European trading session and rebounded from it. Thus, a buy deal should have been opened here. However, the pair went up by 15 points, which was enough to place a Stop Loss order at breakeven, and accordingly the deal was closed during the US session. Meanwhile, the price returned to the 1.2113 level and it tried to decide what to do around this level for an hour and a half. A semblance of a flat has already begun here, which was very difficult to identify. The price crossed this level several times, so after a while it was no longer necessary to react to all these signals. However, traders could still open a deal here, which would definitely be unprofitable by 10-12 points.
The number "1" marks the moment when the US GDP report for the first quarter was published. This indicator is very important, but, as we can see, traders decided to ignore this report, although GDP grew by 6.4%, which is at least in line with forecasts. Thus, we could expected the dollar to strengthen here. But it did not happen.
EUR/USD 1H
You can see on the hourly timeframe how the price reached the extremum level of 1.2145 , bounced off it and has been correcting since then. The nearest target is the critical Kijun-sen line. Rebounding from it could trigger a resumption of the upward trend, which is still supported by two upward trend lines. Corrections throughout the trend are very small, so a rebound from Kijun-sen is real. So in general, an upward trend that is not too strong is still present, with frequent but small pullbacks. In general, 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 (1.2096). 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. Today, the European Union is set to publish its GDP for the first quarter in the second estimate, the CPI for April. Meanwhile, there are less significant reports on changes in the level of income and expenditures of the US population, as well as the consumer sentiment index from the University of Michigan. The most important report of the day is inflation in the European Union.
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.
