EUR/USD 5M
The EUR/USD pair was trading more or less actively during the third trading day of the week. Volatility reached more than 60 points during the day, and in the current circumstances it is almost a record for the EUR/USD pair. Thus, the upward movement continues as we expect. Several important reports were published in both the European Union and the United States throughout Wednesday. The reaction followed only one of them. But first things first. The EU Manufacturing PMI (figure "1" in the chart) and the unemployment rate in the EU (figure "2" in the chart) were published during the European trading session. As you can see, there was no market reaction to these data, although the unemployment rate, for example, fell by 0.2%, which is good for the EU economy. In the afternoon, the ADP report on changes in the number of employees in the US private sector was published, which was twice weaker than forecasted (number "3" in the chart) and the index of business activity in the US ISM manufacturing sector (number "4" in the chart). As you can see, the first report provoked a rather strong decline in the dollar, and the second - its slight appreciation, literally by 15 points, as it turned out to be higher than traders expected to see. Now let's take a look at the trading signals and find out how to trade on Wednesday. The first buy signal at the beginning of the European session turned out to be very imprecise and contradictory. The price initially broke through the extremum level of 1.1805, then dropped below it, and then higher again. In this case, traders had to be patient and wait for a confident breakthrough of the 1.1805 level. Therefore, long positions should have been opened when this happened (around the 1.1816 level). After that, the price rose to the next extreme level of 1.1852, breaking the resistance level of 1.1834 along the way. Therefore, a long position should have been manually closed near the level of 1.1852. The long position brought about 20-25 points in profit. No other trading signals were generated during the day.
Overview of the EUR/USD pair. September 2. All attention is on indicators of the state of the US labor market.
Overview of the GBP/USD pair. September 2. Coronavirus is not asleep and continues to pose a serious threat to humanity and the economy.
EUR/USD 1H
You can clearly see that the price continues to be located within the rising channel on the hourly timeframe, so the upward trend remains relevant. Yesterday the quotes were unable to overcome the critical Kijun-sen line at first, afterwards it rose to the upper border of the channel, and then rebounded from it. Thus, from a technical point of view, the movement was almost perfect. However, again not too strong. Now the price can start a new round of correction within the upward trend. On Wednesday, we continue to recommend considering trading from important levels and lines. The closest important levels at this time are 1.1750, 1.1805, 1.1852, 1.1894, as well as the Senkou Span B (1.1727) and Kijun-sen (1.1795) lines. The Ichimoku indicator lines can change their position 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. Not a single important report or an important event planned in the European Union on September 2. Thus, traders will focus on the US, however, there will not be many important events either. In principle, it will be possible to pay attention only to the evening speech of the representative of the Federal Reserve, Rafael Bostic. Reports like jobless claims or foreign trade surpluses are unlikely to be reflected in the pair's chart.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair fell by 30 points during the last reporting week (August 17-23). So, for now, judging by the chart of the European currency, traders are still in a bearish mood. However, both indicators in the chart above indicate that the bullish mood among the major players remains, which is indirectly another factor that speaks in favor of the resumption of the upward trend in the EUR/USD pair. The non-commercial group of traders, which is the most important, still has more open contracts to buy than sell. This value has been declining recently, but it is still bullish. The mood of professional players became more bearish during the reporting week. The non-commercial group has closed almost 40,000 Buy contracts (longs) and only 7,200 Sell contracts (shorts). Thus, the net position immediately decreased by 33,000. This suggests that the process of selling the European currency continues. However, we knew this and judging simply by the chart of the EUR/USD pair. We believe that the failure to overcome the 1.1700 level will preserve the scenario with a new upward trend, no matter how much the net position of non-commercial traders declines. Because the technique eloquently indicates a very likely renewal of the upward movement. But if the price overcomes the 1.1700 level, big players may feel that this is not just a correction, but a new downward trend and continue to build up short positions. Therefore, in a way, the euro/dollar pair is now at a very important point, price and 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.
