EUR/USD 5M
The EUR/USD pair's volatility on Monday amounted to 46 points. That is, exactly as much as we are used to seeing in recent months. Recall that this is a very low value even for the traditionally weak EUR/USD pair. Nevertheless, the movements themselves were quite interesting yesterday. The pair did not stand in one place during the day. Of the important fundamental events, only the speech of European Central Bank President Christine Lagarde was planned. However, her third consecutive speech did not give any new information to traders. In the chart, the start time is marked with "1". As you can see, no changes in the nature of the pair's movement occurred at this time. Now let's move on to trading signals. The very first signal was, as they say, "borderline". It formed literally 10 minutes before the opening of the European session, when the price crossed the extreme level of 1.1797. Traders had every right to open a short position here, but the price failed to reach the nearest target - the level of 1.1750, and went down only 20 points, which was enough to set the Stop Loss level at breakeven, at which the deal was closed. Further, a buy signal was generated when the pair had already settled above the level of 1.1797, but it was not possible to leave above the Senkou Span B line, thus, a long position should also have been opened, but the profit on it was low - only about 10 points. There was no need to work out a sell signal from the Senkou Span B line, as it was formed quite late.
Overview of the EUR/USD pair. September 14. Speeches by Isabelle Schnabel and Christine Lagarde can help the US dollar.
Overview of the GBP/USD pair. September 14. A week full of macroeconomic statistics.
EUR/USD 1H
The euro/dollar pair broke through the downward trend line on the hourly timeframe, but at the same time it could not settle above the Ichimoku cloud, which is clearly visible on the 4-hour timeframe. Thus, yesterday the downward movement resumed, that is, the downward trend continues. The downtrend line has therefore been rebuilt. However, from our point of view, the downward movement will not last long. It was likely triggered by Lagarde's dovish rhetoric last Thursday, although it could be interpreted in different ways. Note that the pound/dollar pair has not declined over the past few days. On Tuesday, we continue to draw traders' attention to important levels and lines - 1.1750, 1.1805, 1.1857, 1.1894, as well as Senkou Span B (1.1822) and Kijun-sen (1.1824) 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 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. On September 14, the United States is scheduled to publish the consumer price index for August, which, we recall, is very important for future changes in the Federal Reserve's monetary policy. Thus, this report is likely to be followed by a market reaction.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair increased by 75 points during the last reporting week (August 31 - September 6). But the Commitment of Traders (COT) reports, which for several months in a row signaled a decrease in the net position of non-commercial traders, just before level 0 (the first indicator) stopped selling the European currency. That is, at this time the number of open long and short positions in the "non-commercial" group is practically the same, which indicates the neutral mood of this group. Formally, it remains bullish, since a slightly larger number of buy contracts (longs) are still concentrated in the hands of large players, but this advantage is small. Thus, the COT reports do not currently answer the most important questions. Namely: will the bears be able to overcome the 1.1700 level to try to form a downward trend? Are the bulls ready to start forming a new upward trend? During the reporting week, professional traders closed less than a thousand Buy contracts (longs) and 16.5 thousand Sell contracts (shorts). Thus, the net position grew by 15,000 at once, and the mood became a little more bullish. However, one should not forget about the Fed factor as well. Let us remind you that if money injections into the American economy continue, this will further lead to an increase in the money supply and to natural inflation of the dollar. That is, no matter how the players get rid of the European currency, if the Federal Reserve continues to print $120 billion a month, this will not lead to a strong dollar growth and, rather, vice versa. Take note that the stock market is growing rapidly at this time. This means that most of the money that came into the economy from the Fed flows into the stock market. If investors stop buying shares, this could lead to an excess of free money supply, which will provoke a new fall in the dollar.
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.
