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EUR/USD 5M
The EUR/USD pair returned to the level of 1.1807 on Thursday, surpassing it is quite difficult. Markets very quickly moved away from the day before yesterday and yesterday's speeches by Federal Reserve Chairman Jerome Powell in Congress. And this is absolutely correct, since Powell did not announce anything new. He only repeated the information that was already known for a long time. Thus, by and large, traders had nothing to react to. The same goes for the macroeconomic reports on July 15th. In the United States, reports were published on claims for unemployment benefits and industrial production (the time of their release is marked with the numbers "1" and "2" in the chart), however, the deviations from the forecast values and the very degree of significance of these reports did not give much reason to assume a strong market reaction on them. In principle, the chart clearly shows that no reactions followed. Powell's second speech in Congress began a little later, but it was the same in content as the first. Now let's take a look at trading signals. Three of them were formed during the past day. Not the most accurate, not the most precise. At first, the price bounced off the critical line in the European trading session, but failed to reach the nearest target - the Senkou Span B line and returned back to Kijun-sen. However, after forming a buy signal, the price went up 15 points, which was enough to set Stop Loss to breakeven, at which the deal was closed. Then a sell signal was formed, which brought traders around 11 points of profit, as the price bounced off the extremum level of 1.1807. Here, a buy signal was formed, which should have been manually closed in the late afternoon. Considering that the overall volatility of the day was around 45 points, that is, very little, even 10 points of profit - this is not bad.
Overview of the EUR/USD pair. July 16. The Fed will begin to really think about winding up QE no earlier than in 7-8 months.
Overview of the GBP/USD pair. July 16. The EU demands money from the UK. David Frost reiterates the ineffectiveness of the Northern Ireland Protocol.
EUR/USD 1H
There is nothing special to add to the previous reviews on the hourly timeframe for the EUR/USD pair, since there were no major changes over the past day. The pair continues to trade with low volatility and in a very limited price range. There is no trend line or channel now, so the concept of a trend is now rather vague. On the one hand, the downward trend continues, on the other hand, there is no downward movement as such. On Friday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1772, 1.1807, 1.1881, 1.1922, as well as the Senkou Span B (1.1844) and Kijun-sen (1.1826) 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. The European Union will publish inflation for June, we can expect a reaction from the markets. Moreover, there is a high probability that it will also accelerate, following the example of the British and the US, despite the neutral forecasts. An even more important report on retail sales for June will be published in America, but here everything will depend on how much the actual value does not match the forecast. If they practically coincide, no reaction may follow.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair fell by 100 points during the last reporting week (June 29-July 5). Thus, one could expect to see a new weakening of the bullish sentiment of professional players in the Commitment of Traders (COT) report. This is exactly what we saw in the latest report that was released on Friday. The number of buy contracts (longs) for the reporting week increased by 4,000, and the number of sell contracts (shorts) - by 16.5 thousand. Thus, the net position of the "non-commercial" group of traders decreased by 12.5 thousand. Therefore, at the moment we can say that market participants continue to get rid of long positions and build up shorts. Therefore, it is possible to predict a further fall in the European currency. But not everything is so simple. We have already said that the movements of the pair over the past few months look just like a correction against the global upward trend. In addition, the US government and the Fed continue to inject hundreds of billions of dollars into the US economy, inflating the money supply and stimulating inflation. Therefore, big players can get rid of euro positions, but at the same time the dollar supply in the markets will grow, which may lead to the opposite effect. A situation may arise in which the net position of professional players on the euro will decline, while the euro currency will grow. Actually, in October-November-December 2020, this is exactly what happened. The green line of the first indicator (net position of the non-commercial group) was decreasing, while the euro was growing. Thus, we recommend that traders pay more attention to technical analysis.
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.
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