EUR/USD 5M

The EUR/USD pair was not traded on Friday. It is not that we forgot to zoom in on the chart, this is just how the pair moved during Friday. The volatility was just over 30 points. What else can I say? No important events were planned for this day in the European Union, and only one report on industrial production was published in the United States, which, even if it was worked out, what kind of market reaction can we talk about? 10 points? 15? It is better not to have illusions. The market just deflated after a completely crazy Wednesday and an equally illogical Thursday. Recall that on Wednesday, ahead of the announcement of the results of the European Central Bank meeting, the euro currency suddenly increased by 120 points. And the next day it collapsed, although the central bank did not make any decisions, and ECB President Christine Lagarde was set up as usual. Her rhetoric has not changed at all in comparison with previous speeches. Thus, Friday is in some way a payment for overactive Wednesday and Thursday.

Is there anything worth saying about trading signals at all? Formally, a buy signal was formed at the very beginning of the European session. It was even possible to try to work it out. After its formation, the price was able to go up 12 points, and could not gain a foothold below the level of 1.0806. As a result, traders could close a long position at any time.

COT report:

The latest Commitment of Traders (COT) reports are more and more discouraging... because the big players continue to build up long positions in the euro currency! During the reporting week, the number of long positions increased by another 10,800, and the number of shorts from the "non-commercial" group decreased by 1,000. Thus, the net position increased by 12,000 contracts. This means that the bullish mood has intensified. It is bullish, since the total number of long positions now exceeds the total number of short positions for non-commercial traders by 40,000!!! The green line of the first indicator in the chart above clearly signals that the mood of professional players has been bullish in the last three and a half months. Accordingly, the paradox lies in the fact that the mood of traders is bullish, but the euro continues to fall almost non-stop, which is also clearly seen in the chart above. We have already explained in previous articles that this effect is achieved by a higher demand for the US dollar. The demand for the dollar is higher than the demand for the euro, which is why the dollar is growing in tandem with the euro. Based on this conclusion, the data of the COT reports on the euro now do not make it possible to predict the further movement of the pair. They are, one might say, meaningless. However, if the demand for the euro currency also begins to fall among professional players, this may lead to an even greater fall in the euro exchange rate, since the demand for the dollar is likely to remain high due to complex geopolitics and macroeconomics.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. April 18. The foreign exchange market went to rest on Thursday. Preview of the new week: boredom and despondency.

Overview of the GBP/USD pair. April 18. The pound "died" after unjustified somersaults last week. Ahead is a boring week without much hope for the pound.

Forecast and trading signals for GBP/USD on April 18. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

On the hourly timeframe, it is clearly visible that the pair very abruptly began a new round of correction and also completed it quickly, but the downward trend still persists. There are no obstacles for the euro to continue falling. All factors now speak in favor of the dollar's succeeding growth. And even the unjustified growth of the euro last week did not lead to a tangible correction of the pair. We allocate the following levels for trading on Monday – 1.0729, 1.0806, 1.0938, 1.1036, as well as the Senkou Span B (1.1011) and Kijun-sen (1.0845) lines. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but no signals will be formed near them. Signals can be "bounces" and "breakthrough" levels - extremes and lines. Do not forget about placing a Stop Loss order at breakeven if the price went in the right direction of 15 points. This will protect you against possible losses if the signal turns out to be false. No important events or publications are scheduled for April 18 in the European Union and the United States. Most likely, we are waiting for another flat day, although volatility should increase at least a bit. Still, 30 points is nothing. However, you should not count on strong movements either.

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.