EUR/USD 5M

The euro/dollar pair resumed its downward movement on Thursday and by the end of the day was near the Senkou Span B line. Thus, it is now separated from the resumption of the downward trend by one line, and on the 24-hour TF the euro did not overcome the critical line. More precisely, consolidation above Kijun-sen occurred, but the next day the pair returned to the area below this line. Therefore, as of the moment, the probability of the resumption of the downward trend is very high. No important statistics published in the US or the European Union on Thursday. And yet, the pair fell 140 points from the high of the day. Thus, traders successfully sold the euro even without any reason. And this is already a very bad sign for the euro. Recall that the fundamental and geopolitical backgrounds remain very bad for all risky assets and currencies, so we will not be at all surprised if the euro hits its 20-year lows a few more times this year. It again corrected to a value close to 400 points.

Three trading signals were formed yesterday. First, the pair bounced twice from the level of 0.9877, and then overcame it and the critical line. Therefore, traders could open one long position, which closed at a loss of about 35 points, and one short position, which could be closed at a profit of about 50 points, as the price surpassed the level of 0.9813 and spent the rest of the day below it without forming buy signals. The Senkou Span B line kept it from falling further.

COT report:

The Commitment of Traders (COT) reports on the euro in 2022 can be entered in the textbook. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then they showed a bearish mood for several months, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have said, because the demand for the US dollar remains high. Therefore, even if the demand for the euro is growing, the high demand for the dollar does not allow the euro itself to rise. During the reporting week, the number of long positions for the non-commercial group increased by 2,000, while the number of shorts decreased by 1,800. Accordingly, the net position grew by about 200 contracts. This is very small and this fact does not matter much, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 34,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background.

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EUR/USD 1H

The upward trend is still preserved on the hourly timeframe due to the lines of the Ichimoku indicator. If the pair consolidates below the Senkou Span B, it is almost guaranteed to drop back to 0.9553 and renew its 20-year low. Of course, today the US statistics, in particular the NonFarm Payrolls report, can ruin everything, but it is not guaranteed to be bad! It can support the US currency or be neutral in value. We highlight the following levels for trading on Friday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, 1.0124, 1.0195, as well as Senkou Span B (0.9796) and Kijun-sen lines (0.9867). 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 "breakthrough" 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. There will be no important events in the European Union. But reports on unemployment (which may continue to grow) and Nonfarm (which may continue to decline) will be released in America. If the report values turn out to be worse than the forecasts, it will be possible to wait for the pair to roll back upwards.

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.