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EUR/USD 5M
The EUR/USD pair was very sluggish and inactive during the first trading day of the week. By and large, there is not even much to draw the attention of readers to. The European Union and the United States published business activity indices, which had practically no effect on the movement of the euro/dollar pair. The European index of business activity in manufacturing slightly rose in July and reached 62.8. A similar index of business activity, but in the US, it rose to 63.4 points. And the ISM manufacturing index, which was considered the most important and significant, on the contrary, decreased from 60.8 to 59.5 at the end of July. However, absolutely all these changes are not critical, as all three indices published yesterday remained at rather high values. Now let's take a look at trade deals. All trading signals formed around the extremum level of 1.1881, which was canceled at the end of the day and removed from the charts. The first buy signal turned out to be, if not false, then very weak. After its formation, the price went up in half by only 10 points, but at the same time, it bounced off the resistance level of 1.1896. Thus, the signal is formally processed. Further, something completely different from the signal was formed during the US session. The price simply moved along the level of 1.1881 for several hours, so it is impossible to say that any signal was formed at this point. Also around the same time, two reports were published in America (marked with the numbers "2" and "3" in the chart). As you can see, there were no changes after them. Thus, the last signal had to be clearly ignored. In general, traders may have managed to earn about 10 points on Monday, but hardly more. The main thing is that we managed to avoid losses.
Overview of the EUR/USD pair. August 3. A calm start to a potentially very important trading week.
Overview of the GBP/USD pair. August 3. Britain is in the process of deporting Europeans. Michael Gove has no objection to the Scottish referendum.
EUR/USD 1H
The downward correction ended very quickly on the hourly timeframe for the euro/dollar pair, but another round of it may follow in the coming days. At the moment, the price is above the Senkou Span B and Kijun-sen lines, as well as above the trend line, so the upward trend remains in effect. At the same time, the pair continues to trade very sluggishly and weakly. Unfortunately. On Tuesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1852, 1.1881, 1.1922, as well as the Senkou Span B (1.1801) and Kijun-sen (1.1842) 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 and the United States will not release any important reports on Tuesday. However, what difference does it make if traders still do not react to important reports or to secondary ones? Recall that at the end of last week, the markets ignored the data on the GDP of the US and the European Union, as well as several other rather important reports.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD increased by 5 points during the last reporting week (July 20-26). However, the pair's movements are not the main thing. The main thing is that the major players have been increasing the number of sell contracts (shorts) for the sixth week in a row and closing buy contracts (longs) for the euro currency. This is very clearly seen in the second indicator in the chart, which has been steadily declining recently. Recall that this indicator displays the net position of the "non-commercial" group, the most important group of traders. Non-commercial traders closed 5,600 buy contracts (longs) and opened 1,700 sell contracts (shorts). Thus, their net position decreased by another 7,300 contracts. This suggests that the bullish mood of professional traders continues to weaken. At the same time, we would like to note that the euro currency has not started a new downward trend and this is a very important point, from our point of view. We have already said earlier that when the red and green lines of the first indicator (the net positions of the "non-commercial" and "commercial" groups of traders) move towards each other after a long period of distance, it means that the current trend is completed and a new one is emerging. However, in our case, we are talking about a correction against a global upward trend. It turns out that, on the one hand, the readings of the Commitment of Traders (COT) reports and the movement of the pair coincide, and on the other hand, the upward trend persists, and the euro has not fallen very much and has fallen in price. Moreover, it did not even manage to update the previous local low. From our point of view, this suggests that the actions of major players are again overlapped by the actions of the Federal Reserve, which continues to print money. Thus, the money supply in the United States continues to grow, which leads to the depreciation of the dollar. And this factor negates all the efforts of major players who are getting rid of the euro.
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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