EUR/USD 5M

Last Friday, the EUR/USD pair was trading in an open flat. The volatility of the pair decreased and amounted to about 68 points. A downward correction did not start during the day, which would be a fairly logical development of events. However, the upward movement did not continue. Thus, the price continues to remain near its local highs, and this is very important for the euro. The US published reports on personal income and spending of the American population. Far from the most important data, which rarely provoke serious movements. This time the report on expenses exceeded the forecasts, but on income it turned out to be slightly weaker. The bulls continue to bend their line, although it is quite possible that it is not the bulls who are active, but simply the bears taking profits on previously opened short positions. One way or another, the euro is growing and frankly seizing the opportunity, as fundamental and geopolitical factors are not on its side. However, we have an unbroken upward trend line on the hourly time frame, so there is no signal to resume the fall at the moment. Therefore, you can buy.

As for trading deals, only two trading signals were formed on Friday. Both are near the extreme level of 1.0748. Both times - a rebound from this level and a fall of 30-40 points. Since the nearest line was critical, to which it was necessary to go 2.5 times more, it was very difficult to count on Take Profit. Consequently, traders immediately had to count on the manual closure of both transactions. In any case, Stop Loss should have been placed at breakeven for both short positions, so there could not be a loss. In any case, a few dozen points could be earned, since the second deal definitely had to be closed manually on Friday evening.

COT report:

The latest Commitment of Traders (COT) reports on the euro raised a lot of questions. Recall that in the past few months, they showed a blatant bullish mood of professional players, but the euro fell all the time. Now the situation has begun to change, but not at the expense of the market players themselves, but due to the fact that the euro has begun to grow. That is, the mood of traders remains bullish (according to COT reports), and the euro began to grow due to the fact that it needs to be corrected from time to time. During the reporting week, the number of long positions increased by 6,300, while the number of shorts in the non-commercial group decreased by 12,200. Thus, the net position grew by 18,500 contracts per week. The number of long positions exceeds the number of short positions for non-commercial traders by 40,000 already. From our point of view, this happens because the demand for the US dollar remains much higher than the demand for the euro. Now a certain "respite" has begun for the euro, but this does not mean that tomorrow the global downward trend will not resume, and the data from COT reports will not continue to contradict the real state of things on the market. We therefore believe that such reporting data still cannot be relied upon for forecasting. At this time, both on the 4-hour timeframe and on the hourly there are clear trends, trend lines, and channels that indicate where the pair will move next. It is better to rely on them when making trading decisions.

We recommend that you familiarize yourself with:

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EUR/USD 1H

It is clearly seen on the hourly timeframe that the ascending trend line remains relevant. Despite the fact that the euro's growth is now purely technical, there is a trend, which means that you should continue trading on it. If the pair settles below the trend line, then the downward trend may resume, because the price has not yet moved far enough from its 20-year lows to consider the global downtrend to be 100% completed. Moreover, in recent days, the euro's growth has been slowing down. Today we highlight the following levels for trading - 1.0459, 1.0579, 1.0637, 1.0748, 1.0806, 1.0938, as well as Senkou Span B (1.0549) and Kijun-sen (1 .0703). 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 "breakthroughs" 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. Nothing interesting is planned for May 30 in the European Union, and the calendar of events is also empty in the US. Thus, even theoretically, traders have nothing to react to. However, the pair's volatility may remain "medium" in strength, as 60-70 points a day in recent weeks is absolutely normal.

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.