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EUR/USD 5M
Yesterday, the EUR/USD pair was trading as it did on a holiday. It practically stood in one place. The pair passed 30 points from the low to the high of the day. Judge for yourself how much this value corresponds to the participants' desire to trade and make a profit. Usually, we recommend that novice traders set Take Profit for the EUR USD pair at 30 points, which implies that the volatility during the day is at least 50-60 points. The United States celebrated Independence Day on the fourth of July, so it's no surprise that July 5 was also practically a day off. Therefore, the overall weak activity of the markets is not something unexpected. Throughout the trading day, the European Union published an index of business activity in the service sector, and we also had two speeches by European Central Bank President Christine Lagarde. However, you don't even need to go to Google to understand that Lagarde did not report anything important, otherwise the markets would at least somehow react to her speech. Thus, it was extremely difficult to trade yesterday. Nevertheless, during the day, three signals were formed that could formally be worked out. Formally - because by the middle of the European session it became clear that there is nothing to expect from the pair. Nevertheless, the price initially surpassed the Kijun-sen line, then bounced off it, and then consolidated back below it. The first signal should be ignored, as the price spent an hour and a half trading along the critical line. The second signal - it was possible to work out with a long position, but it turned out to be false and brought a loss of 8-10 points. The third signal also turned out to be false, but it still allowed traders to earn about 8-10 points, as it should have been manually closed in the late afternoon. As a result, the day could have ended at zero.
Overview of the EUR/USD pair. July 6. A global corporate tax of 15% will be introduced!
Overview of the GBP/USD pair. July 6. The UK celebrates the 5th anniversary of the Brexit decision.
EUR/USD 1H
You can clearly see the downward trend on the hourly timeframe, however, there is still no way to form a trend line or channel. Thus, the dollar still remains in a better position than the euro, but the lack of a reference point on the hourly chart makes it difficult to determine a change in trend. In general, it is now generally quite difficult to say whether the downward trend at 1H TF has ended? Plus, the pair spends 3 out of 5 trading days in low volatility, which also makes it impossible to draw clear conclusions. On Tuesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1800, 1.1837, 1.1922 and 1.1971, as well as the Senkou Span B (1.1910) and Kijun-sen (1.1860) 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. Minor reports on retail sales and business sentiment from the ZEW Institute are scheduled for release on Tuesday. It is unlikely that traders will pay any attention to this data. Indexes of business activity in the services sector ISM and Markit will be published in America. The ISM index can provoke movement during Tuesday. However, given its high value, a very unexpected index value is required today for market participants to work out.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair rose by 10 points during the last reporting week (June 22-28). The changes were minimal. There were serious changes (both in the COT report and in the price plan) a week earlier, when the pair fell by 250 points, and big players closed a large number of buy contracts (longs). According to the latest Commitment of Traders (COT) report, professional traders closed about 500 buy contracts and opened 3.6 thousand sell contracts (shorts) during the reporting week. This means that the net position for the non-commercial group of traders dropped 4,000 at once, which is quite a bit. Therefore, major players remain bullish, but the sentiment continues to weaken. You can see this in both indicators in the chart above. On the first indicator, the green line (net position of the non-commercial group) continues to approach the red line (net position of the commercial group), which means the end of the current upward trend. Maybe it is the global trend that will not end, but at this time a new downward trend segment of the trend is clearly visible (recall that on the 24-hour timeframe this segment may be the second, corrective with a target of 1.1700). The second indicator shows that the net position of non-commercial traders have decreased. The same thing: since this indicator is declining, this means that the chances for the euro's growth are also falling at this time. However, in general, we recall that the total number of Buy-positions for large players is now 210,000, and Sell-positions - 124,000. That is, the market sentiment is still bullish. Plus, do not forget about the fact that the Federal Reserve and the Congress are injecting huge amounts into the US economy, as well as the fact that inflation is high in America.
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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