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EUR/USD 5M
The EUR/USD pair, unexpectedly for many, traded in a trend all day and practically did not even correct on Thursday. This development of events came as a big surprise to us, since we recently observed the most complex and ugly movements from it for several weeks now, which were quite difficult to work out. Yesterday, when neither the European Union nor the United States published an important macroeconomic report, the quotes of the European currency began to grow in the morning and remained in this direction for almost the entire day. Of course, the euro's appreciation could be attributed to the unexpected press conference of the European Central Bank, during which it became known that it followed the Federal Reserve's example and now admits that inflation will be above 2% for some time. Although, to be honest, we do not consider this that important. Previously, the interpretation was "2% or slightly lower", which could not be achieved for most of the last decade, now the interpretation was "2% or slightly higher", and we do not know how the ECB is going to provide a stable 2% in the medium term. And in any case, this news came from the ECB clearly not at 8 am, so it can hardly be concluded that the euro was growing on this message. As for trading signals, three were formed yesterday. The price went beyond the level of 1.1800 at the very beginning of the European session, which served as a signal to open long positions. Subsequently, the pair rose to the level of 1.1837 and the Kijun-sen line and bounced off them, so the deal should have been closed near them with around 25-26 points of profit. It was also necessary to open short positions on this signal, but the downward movement could not continue, so the short position was closed at a loss of 15 points when the price settled above the critical line. And this breakthrough served as a signal to open new long positions, which should have been manually closed in the late afternoon, since the price would still not reach the next target - the Senkou Span B line. Thus, another +10 points of profit, for a total of 25.
Overview of the EUR/USD pair. July 9. Absolutely bland Fed minutes. The US money supply continues to grow.
Overview of the GBP/USD pair. July 9. The number of diseases in the UK continues to rise. Brexit continues to negatively affect the UK economy.
EUR/USD 1H
You can clearly see the downward trend on the hourly timeframe, and finally there is an opportunity to form a trend line. The price could overcome this line today, so there is no special sense in it so far. It looks quite beautiful, clearly passing three price peaks. But if the upward movement continues, then it will be easily overcome. True, this will also have its own benefit, since the trend will change to an upward one. On Friday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1800, 1.1837, 1.1922, as well as the Senkou Span B (1.1890) and Kijun-sen (1.1836) 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. No important publications planned in the United States and the European Union on Friday. The only interesting event of the day will be Christine Lagarde's speech, but it is unlikely for her to mention anything important for the markets. On the other hand, we could expect new information from her today and comments on the updated monetary policy of the ECB (change in the inflation target).
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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