EUR/USD 5M
The EUR/USD pair traded quite actively during the second trading day of the new week. The overall volatility of the day exceeded 70 points, which is almost a record for the euro/dollar pair at this time. Thus, thanks to this, a sufficient number of signals were formed during the day. Unfortunately, there was also a sufficient amount of macroeconomic reports, which did not have any effect on the pair's movement and only confused. We have reiterated that traders work out reports very selectively at this time. All reports were out of luck yesterday. The number "1" in the chart marks the moment when the ZEW Business Sentiment Index and the European Union Retail Sales Report was released. As you can see, by the time this data was published, the euro had already dropped 45 points. The number "2" marks the moment for the Markit business activity index for the service sector in the US, and the number "3" - a similar index, but according to the ISM version. Despite the fact that the ISM index is considered quite important, and its value decreased by 4 points at the end of June, as we can see, no price reversals occurred at that time in the chart. And the US dollar did not begin to fall after the not very strong ISM. Thus, we would conclude that there was no reaction at all to the reports on Tuesday. Let's go back to trading signals. The first one formed in the middle of the European session when the price crossed the critical line. Unfortunately, by that time the price had already passed a rather long distance, so the signal was somewhat late. Nevertheless, it was possible to earn about 15 points on it, since the nearest level at 1.1837 was reached. This was followed by a rebound from this level, which should be interpreted as a buy signal, however, it turned out to be false and ate all the profit from the first deal, since the price subsequently settled below the level of 1.1837. At this point, new short positions should have been opened, however, it was not possible to earn money on them either, since after two new signals were formed at once, the price did not manage to go down at least 10-20 points. As a result, the trade should have been manually closed at zero profit in the evening.
Overview of the EUR/USD pair. July 7. Existing vaccines are not very effective against the "Indian" strain of COVID.
Overview of the GBP/USD pair. July 7. The European Union threatens Britain with the court. The number of infections with the "Indian" strain is growing in Great Britain
EUR/USD 1H
The downward trend is clearly visible on the hourly timeframe, however, it is still impossible to form a trend line or channel. Thus, we can only see a downward trend, which makes little sense. At this time, it is not even clear whether the US dollar can continue to strengthen? According to the global technical factors that we consider in our fundamental articles, yes it can. On Wednesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1800, 1.1837, 1.1922, as well as the Senkou Span B (1.1910) and Kijun-sen (1.1860) lines. The Ichimoku indicator lines can move 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. Only secondary events scheduled in the European Union and the United States on Wednesday, which are unlikely to cause at least some reaction from market participants. The European Union will publish the economic forecast from the European Commission, and the Federal Reserve - the minutes of the US central bank's last meeting.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair rose by 10 points during the last reporting week (June 22-28). The changes were minimal. There were serious changes (both in the COT report and in the price plan) a week earlier, when the pair fell by 250 points, and big players closed a large number of buy contracts (longs). According to the latest Commitment of Traders (COT) report, professional traders closed about 500 buy contracts and opened 3.6 thousand sell contracts (shorts) during the reporting week. This means that the net position for the non-commercial group of traders dropped 4,000 at once, which is quite a bit. Therefore, major players remain bullish, but the sentiment continues to weaken. You can see this in both indicators in the chart above. On the first indicator, the green line (net position of the non-commercial group) continues to approach the red line (net position of the commercial group), which means the end of the current upward trend. Maybe it is the global trend that will not end, but at this time a new downward trend segment of the trend is clearly visible (recall that on the 24-hour timeframe this segment may be the second, corrective with a target of 1.1700). The second indicator shows that the net position of non-commercial traders have decreased. The same thing: since this indicator is declining, this means that the chances for the euro's growth are also falling at this time. However, in general, we recall that the total number of Buy-positions for large players is now 210,000, and Sell-positions - 124,000. That is, the market sentiment is still bullish. Plus, do not forget about the fact that the Federal Reserve and the Congress are injecting huge amounts into the US economy, as well as the fact that inflation is high in America.
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.
