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EUR/USD 5M
The EUR/USD pair continued a very weak downward movement during the second trading day of the week. The upward correction after a strong drop in quotes after the Federal Reserve meeting has already ended, so the pair is basically ready for a new decline. However, a sluggish decline continues, and volatility is 50-60 points almost every day. In fundamental articles, we have already said that with such volatility, in principle, it is very difficult to claim a large number of signals or profits. In practice, this is exactly how it turns out. Yesterday, there was only one signal that was formed – for selling – at the very beginning of the European trading session. The price bounced from the extreme level of 1.1922. In the future, the quotes did not reach the level of 1.1864, nor returned back to the level of 1.1922. Thus, the short position should have been manually closed in the evening, that is, about 17 points in profit. Given the volatility of the pair at this time, this is a very good result. I would also like to note that not a single important report was published during the day. The number " 1 " marks the beginning of the speech of European Central Bank President Christine Lagarde, but by the fact that the volatility in the next hour did not change at all, we can conclude that she did not tell the markets anything interesting. The number " 2 " marks the moment when the consumer confidence indicator in the US was published, but after that the pair went down "as much as" 10 points, so it is also not necessary to talk about any reaction of traders.
Overview of the EUR/USD pair. June 30. The US dollar has set its sights on the 17th level, but it will be very difficult to continue strengthening after reaching this level.
Overview of the GBP/USD pair. June 30. The pound is under pressure due to the increase in cases of coronavirus in the UK.
EUR/USD 1H
On the hourly timeframe, you can also clearly see that the euro/dollar pair is barely crawling at this time. The price has settled below the critical line, which slightly increases the likelihood of further downward movement. However, we draw your attention to the fact that at this time it is still impossible to form either a trend line or a channel. Thus, from our point of view, the prospects for the dollar's succeeding growth are solely in the need for another round of the downward correction globally (on a 24-hour timeframe). On Wednesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1800, 1.1851, 1.1922, 1.1971 and 1.1888, as well as the Senkou Span B (1.1997) and Kijun-sen (1.1927) 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. On the third trading day of the week, the European Union is scheduled to publish the consumer price index, and in the US - the ADP report on changes in the number of employees in the private sector. We believe that it is the second report that is more important and can provoke a strong market reaction.
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 200 points during the last reporting week (June 15-21). We recommended in previous articles to wait for the publication of the new Commitment of Traders (COT) report, since it should have included those days when traders were actively working out the results of the Fed meeting. It was then that the currency pair fell by 250 points, after which it is recovering at this time. According to the latest COT report, professional traders closed about 5,000 buy contracts (longs) and opened 24,000 sell contracts (shorts) during the reporting week. This means that the net position for the group of non-commercial traders dropped by 29 thousand at once, which is quite a lot. Thus, the bullish sentiment of the major players is still bullish, but continues to weaken. In principle, the weakening of the bullish sentiment is clearly visible both in the first indicator and in the second. On the first indicator, the green line (net position of the non-commercial group) began to approach the red line (net position of the commercial group), which means the end of the current trend. Perhaps it is the global trend that will not end, but there is no point in denying that a new round of the downward movement has now begun. The second indicator shows a decrease in the size of the net position for non-commercial traders over time. The same thing: since this indicator is falling, this means that the chances for the euro's growth are falling at this time. However, in general, we recall that the total number of Buy-positions for large players is now 210 thousand, and Sell-positions - 120 thousand. Therefore, the mood is still bullish.
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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