EUR/USD 5M

The EUR/USD pair continued its downward movement on Monday. Since both lines of the Ichimoku indicator have been overcome, we have formed a new downward channel, which emphasizes the current trend. The euro continues to steadily fall to its 20-year lows, to which only 150 points remain to go. Now we have no doubt that a new update of these lows is just around the corner. Of course, there will be several events this week that could change the mood of the market. For example, a report on US inflation, which will largely determine how much the Federal Reserve will raise the rate at the next meeting. Several important geopolitical events may also happen. However, if you look only at the technique, then the euro's fall does not raise doubts and questions. The pair's volatility decreased on Monday, which is not surprising, since there were no important events either in the US or in the European Union on that day.

In regards to trading signals, the situation was as simple as possible, since not a single one was formed yesterday. We believe that this is not bad, since in conditions when the movement is not the strongest and volatility is not high, several false signals could have been formed. Therefore, it is better to be without profit than at a loss.

COT report:

The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. October 11. This has never happened - and here you are, again!

Overview of the GBP/USD pair. October 11. "Anti-British" sentiment continues to grow in Scotland.

Forecast and trading signals for GBP/USD on October 11. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

The upward trend has finally been canceled on the hourly timeframe. This week, we can observe a systematic decline in the pair's quotes, and even with the presence of important events and reports, we do not believe that the market mood will change dramatically. It is now clear that the last round of the upward movement was another correction within the global downward trend, which means that the pair has now resumed its march to the downside. On Tuesday, we highlight the following levels for trading - 0.9553, 0.9747, 0.9844, 0.9945, 1.0019, 1.0072, as well as Senkou Span B (0.9767) and Kijun-sen (0 .9840). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. There are no important events and reports planned in the EU and the US on Tuesday, so the day can be relatively calm. However, the euro may continue to fall.

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.