EUR/USD 5M

The EUR/USD pair was practically immobilized on Monday. This is perfectly visible even on the hourly TF, and even more so on the 4-hour timeframe. In general, the euro has been standing in one place (in the horizontal channel) for more than a week, which somewhat surprises us. The fact is that it is currently such a period in the foreign exchange market, when there are quite a lot of important reports and events. Moreover, among the fundamental events there are several meetings of central banks at once, so now the pair should be trading quite actively. But instead, we see a flat around the pair's 20-year lows. Recall that the euro managed to correct, as usual, "in its own style." That is, move away from the lows by 300 points and that's it. We do not yet see how the euro can continue its growth. There was not a single important macroeconomic event or publication in either the US or the EU on Monday. The lines of the Ichimoku indicator are approaching the price closely due to the flat and are no longer sources of strong signals. Plus, it is always very difficult to trade in a flat. There is hope that the flat will end on Wednesday evening, but judging by the current movements, the pair may remain inside the horizontal channel after Wednesday.

There were few trading signals on Monday. And since the pair continues to be in a flat, it was very difficult to count on profitable transactions. The price bounced off the critical line (the signal was weak, inaccurate and uncertain) at the very beginning of the European trading session and after that was able to go in the right direction for about 45 points. But failed to reach the nearest target level of 1.0269, so the deal could only be closed manually in the late afternoon. Profit on it amounted to a maximum of 10 points.

COT report:

The Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that for most of 2022 they showed an openly bullish mood of professional players, but at the same time, the euro was falling at the same time. At this time, the situation has changed, and NOT in favor of the euro. If earlier the mood was bullish, but the euro was falling, now the mood has become bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions decreased by 1,300, while the number of shorts in the non-commercial group increased by 16,000. Accordingly, the net position decreased again, by almost 15,000 contracts. The mood of the big players remains bearish and even intensifies in recent weeks. From our point of view, this fact very eloquently indicates that at this time even professional traders do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 43,000. Therefore, we can state that not only does the demand for the US dollar remain high, but that the demand for the euro is quite low. This may lead to a new, even greater fall of the euro. In principle, over the past few months or even more, the euro has not been able to show even a tangible correction, not to mention something more. The highest upward movement was about 400 points.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. July 26. What does the new week have in store for us?

Overview of the GBP/USD pair. July 26. The pound is trying to make the most of the last days before the Fed's 0.75% rate hike.

Forecast and trading signals for GBP/USD on July 26. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

The flat is also perfectly visible on the hourly timeframe. The pair can move relatively freely in a channel 140 points wide, even without working off its boundaries. Therefore, with strong signals, there is now, in principle, a shortage. Well, in itself, the fact of a flat does not add optimism and faith in making a profit on the foreign exchange market. We highlight the following levels for trading on Tuesday - 1.0000, 1.0072, 1.0120, 1.0269, 1.0340-1.0366, 1.0485, as well as the Senkou Span B (1.0113) and Kijun-sen lines (1.0204). 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 are no major events or reports scheduled for July 26 in the US and EU. Thus, the pair may continue to remain inside the horizontal channel today. Overcoming the 1.0269 level will indicate the resumption of the short-term upward trend.

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.