EUR/USD 5M
The EUR/USD pair corrected on Tuesday. Recall that a very weak downward trend has been formed in the last few days, which is more visible on the hourly TF. Traders were waiting for a lot of important events, news and statistics from Tuesday, but in the end they did not wait for anything. The Federal Reserve meeting was declared closed and no one shared information about its results. In the morning, news arrived that Russia was returning some troops from the Ukrainian border to their usual locations, but this news was not confirmed by anything during the day. And traders completely ignored the macroeconomic statistics. The report on GDP in the European Union should not have provoked any reaction, since this was the second assessment and the market already clearly understood what figures to expect. The actual value completely coincided with the forecast. No important information published in the US.
No trading signals were generated during the day. And this, from our point of view, is for the best. Despite the fact that the euro/dollar pair still shows a movement that can work out, unlike the pound/ dollar, nevertheless, the nature of this movement is not the best. The pair spent the whole day between the Senkou Span B line and the extreme level of 1.1375. It could not work out either the first or the second, therefore, traders simply did not have any reasons to enter the market. This week, tension in the markets will continue, as negotiations on the Ukrainian-Russian conflict still do not yield any results. This means that the escalation of the conflict in Eastern Europe can break out at any moment.
COT report
The new Commitment of Traders (COT) report, which was released on Friday, did not show any major changes, and its data does not reflect what is happening in the foreign exchange market at all. In short, professional players continued to increase long positions during the reporting week, as well as get rid of short positions. In total, the net position of the non-commercial group increased by 11,000. So now we have a picture in which major players have been buying the euro currency for several consecutive weeks, and their mood is clearly bullish. The new COT report shows the behavior of traders a week earlier (it comes out with a 3-day delay). And last week, the euro was growing steadily. However, look at the chart above: is the current technical picture similar to the beginning of an upward trend? After all, even last week the price updated its annual lows! Thus, formally, it can be concluded that the major players are already looking towards long positions on the euro currency, but in practice this mood is so unstable that at any moment it can result in a new fall of the euro/dollar pair. The main factor that should be taken into account now is the lack of growth factors in the euro. And if we add to this the tense geopolitical situation that developed at the beginning of the new year, then it is the dollar that has additional growth factors. And there were plenty of them even without geopolitics. Thus, as before, there is a high probability of dollar growth.
We recommend to familiarize yourself with:
Overview of the EUR/USD pair. February 16. Temporary relief. It's too temporary.
Overview of the GBP/USD pair. February 16. The Fed has stirred up the markets and has not given any answers. "Think what you want."
Forecast and trading signals for GBP/USD on February 16. Detailed analysis of the movement of the pair and trading transactions.
EUR/USD 1H
On the hourly timeframe, the euro/dollar pair dropped to the Senkou Span B line and bounced off it, which is better seen on the 4-hour TF. At the moment, we have moved the Senkou Span B line higher, since today it will be located higher than in the place where the price rebound was made from it. In general, the negative fundamental background retains a high probability of a new fall in the euro currency and only the de-escalation of the conflict in eastern Europe can reduce the demand for the dollar. We allocate the following levels for trading on Wednesday – 1.1192, 1.1234, 1.1274, 1.1375, 1.1482, 1.1507, as well as the Senkou Span B (1.1320) and Kijun-sen (1.1395) lines. There are also support and resistance levels, but no signals will be formed near them. The lines of the Ichimoku indicator may change their position during the day, which should be taken into account when searching for trading signals. Signals can be "bounces" and "breakthrough" levels - extremes and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction of 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union will publish a report on industrial production, which is unlikely to interest traders. There are more important data in America, in particular on retail trade and also on industrial production. These reports have a better chance of being worked out by the market. In general, the whole world will continue to monitor the development of the Ukrainian-Russian crisis.
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.
