EUR/USD 5M
The EUR/USD pair didn't move last Friday. Friday's volatility was 30 points, which can be considered an absolute anti-record. Even the relatively important reports on European inflation and US retail sales did not help. Traders simply refused to react to external factors. Thus, trading was both simple and complex at the same time. Simple - because if a flat was identified in time, then the market should not have entered the market at all. Difficult - because this flat had yet to be identified. Let's try to figure out how to proceed. The first half of the European trading session was absolutely flat. The price did not even move away from the extremum level of 1.1807, so one cannot even say that any specific signals were formed around it. Subsequently, the pair's quotes still moved 10 points away from this level, however, there was no clear and accurate buy signal. Further, a relatively clear sell signal was formed when the price settled below the level of 1.1807, but it turned out to be false, and the price managed to go down only about 8 points after its formation and returned to the level of 1.1807. Therefore, when the price settled above it, short positions should have been closed. The loss on it was worth 10 points. The price went exactly along the level of 1.1807 throughout the US trading session, without forming a single sensible signal. Therefore, one should not have traded in the afternoon. The number "1" marks the time when the European Union inflation report was published, which reached 1.9% y/y, exactly in line with the forecast. The number "2" marks the time when the retail trade report was released in the United States, which turned out to be better than forecasted in June. However, as we can see, there was no reaction to either the first or the second report.
EUR/USD 1H
There is nothing special to add to the previous reviews on the hourly timeframe for the EUR/USD pair, since there weren't any major changes over the past day. The pair continues to trade with low volatility and in a very limited price range. There is no trend line or channel now, so the concept of a trend is now rather vague, and by and large is simply not there. There is no downward movement now. We still recommend trading from important levels and lines on Monday. The nearest important levels at this time are 1.1772, 1.1807, 1.1881, 1.1922, as well as the Senkou Span B (1.1844) and Kijun-sen (1.1826) lines. The Ichimoku indicator lines can move during the day, which should be taken into account when looking for trading signals. 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 points in the right direction. This will protect you against possible losses if the signal turns out to be false. No macroeconomic reports in the European Union and the United States on Monday. Therefore, trading is unlikely to be active. Most likely, there will be flat or very weak movements throughout the day.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair did not gain or lose a single point during the last reporting week (July 6-12). However, the Commitment of Traders (COT) report clearly shows that professional traders continue to build up short positions in the European currency. Let's try to figure out what this means for the euro/dollar pair. A group of non-commercial traders opened 2,300 buy contracts (longs) and 14,000 sell contracts (shorts) during the reporting week. Thus, the net position of the major players has been decreasing for the third or fourth consecutive week. This time it was reduced by almost 12,000 contracts. Thus, the bullish sentiment of traders continues to weaken. However, we would like to remind you that, globally, the upward trend is maintained for the euro/dollar pair, and at this time, a correctional movement is just taking place. Also remember the global fundamental factor, which is the fact that trillions of dollars are being injected into the American economy. It still continues to inflate the US money supply. Therefore, we may again face a paradoxical picture, when the demand for the euro is falling, but the single currency itself is rising. This effect can be achieved if the demand for the dollar falls at a faster rate or the supply of the dollar grows faster. However, it is precisely the latter that has been happening all the time over the past year and a half. We have repeatedly cited data on the money supply in the United States and concluded that for the M1 aggregate it has grown several times over the past year and a half. Thus, formally, the chances of a further decline in the euro have been growing for a month, according to COT reports. And in fact, the upward trend in the EUR/USD pair can resume at any time.
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.
