Analysis of EUR/USD, 5-minute chart

The euro/dollar pair showed absolutely no interesting movement on Wednesday. Therefore, this day could be safely forgotten. Volatility dropped sharply, and there were practically no macroeconomic and fundamental events. We can only note the US retail sales report, which was slightly above the forecast, and the industrial production report, which was slightly weaker than the forecast. Therefore, both of these reports in the aggregate did not have any impact on the movement of the euro/dollar pair. At the same time, the ascending trend line remains relevant, and the price continues to be above the critical line. Therefore, even despite a slight correction, almost all technical indicators continue to point upwards. We doubt that the euro will continue to rise, since there are definitely no grounds for this now. Of course, traders can just buy the euro and sell the dollar for no reason. However, for obvious reasons, we cannot take this option into account. For this, there is a technical analysis, which, regardless of the foundation and macroeconomics, shows the current trend.

There were only two trading signals on Wednesday. At the beginning of the European trading session, the price rebounded from the 1.0340-1.0366 area, after which it went up 56 points. It was possible to earn on this position, but then it had to be closed only manually, since the pair did not reach the target level. Already late in the evening, a second signal to buy was formed near the same area, but it should not have been worked out.

COT report

In 2022, the Commitment of Traders (COT) report for the euro is becoming more and more interesting. In the first part of the year, the reports were pointing to the bullish sentiment among professional traders. However, the euro was confidently losing value. Then, for several months, reports were reflecting bearish sentiment and the euro was also falling. Now, the net position of non-commercial traders is bullish again. The euro managed to rise above its 20-year low, adding 500 pips. This could be explained by the high demand for the US dollar amid the difficult geopolitical situation in the world. Even if demand for the euro is rising, high demand for the greenback prevents the euro from growing.

In the given period, the number of long positions initiated by non-commercial traders increased by 13,000, whereas the number of short orders declined by 17,000. As a result, the net position increased by 30,000 contracts. However, this could hardly affect the situation since the euro is still at the bottom. The second indicator in the chart above shows that the net position is now quite high, but a little higher there is a chart of the pair's movement itself and we can see that the euro again cannot benefit from this seemingly bullish factor. The number of longs exceeds the number of shorts by 106,000, but the euro is still trading low. Thus, the net position of non-commercial traders may go on rising without changing the market situation. If we look at the overall indicators of open longs and shorts across all categories of traders, then there are 23,000 more shorts (617,000 vs 594,000).

Analysis of EUR/USD, 1-hour chart

You can see that the pair continues to rise on the one-hour chart, has overcome the Ichimoku cloud on the 24-hour chart, as well as all the Ichimoku lines on the 4-hour chart. Last week, the reason for the growth was, of course, the US inflation report. However, it is rather difficult to say why the euro is trading so high and not falling this week.

On Thursday, the pair may trade at the following levels: 1.0072, 1.0119, 1.0195, 1.0269, 1.0340-1.0366, 1.0485, 1.0579, 1.0637, as well as the Senkou Span B (1.0046) and Kijun-sen (1.0324). Lines of the Ichimoku indicator may move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but signals are not formed near these levels. Bounces and breakouts of the extreme levels and lines could act as signals. Don't forget about stop-loss orders, if the price covers 15 pips in the right direction. This will prevent you from losses in case of a false signal.

The European Union published a report on inflation for October in the second assessment, which could not provoke any reaction from traders. And there was nothing interesting at all in America.

What we see on the trading charts:

Price levels of support and resistance are thick red lines, near which the movement may end. They do not provide trading signals.

The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, moved to the one-hour chart from the 4-hour one. They are strong lines.

Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals.

Yellow lines are trend lines, trend channels, and any other technical patterns.

Indicator 1 on the COT charts reflects the net position size of each category of traders.

Indicator 2 on the COT charts reflects the net position size for the non-commercial group.