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EUR/USD 5M
The EUR/USD pair "died" on Wednesday. Volatility during the day before the announcement of the results of the Federal Reserve meeting was no more than 30 points. This means only one thing: the markets were entirely focused on the Federal Reserve meeting since the morning and had no desire to take risks during the day. Thus, since we do not consider the movements that took place after the summing up of the meeting of the US central bank, there is nothing to analyze by and large. The pair was in a total flat all day. The level of 1.1266, which was located neatly in the middle of this channel, was overcome several times. However, the flat was obvious from the very morning, so all these signals should be ignored. And the markets decided to ignore the report on US retail sales for November. Instead of an increase of 0.8%, the indicator grew by only 0.3% on a monthly basis, but the US dollar did not show any movement in this regard. It will be best to analyze all evening movements later, because, firstly, the Europeans will also want to work out the results of the Fed meeting, and this will not happen until this morning, and secondly, the results of the European Central Bank meeting will be announced today, which may also provoke a market reaction. And in any case, it is necessary that the markets calm down a little after all these events.
EUR/USD 1H
On the hourly timeframe, the pair has been in a correction state against the weakest upward trend for more than a week. There is no point in studying the pair's "flights" from the last couple of nights. We need to wait until the markets come to their senses, and the announcement of the results of the ECB meeting will also take place. However, the upward trend is broken in any case, as the pair has overcome the trend line. We highlight the following levels for trading n Thursday - 1.1192, 1.1234, 1.1324, 1.1375, as well as the Senkou Span B (1.1304) and Kijun-sen (1.1285) lines. The lines of the Ichimoku indicator may change their position during the day, which should be taken into account when searching for trading signals. Signals can be "rebounds" and "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 host, so to speak, a less significant meeting of the ECB on December 16. Nevertheless, surprises are possible, a strong reaction of the markets is possible. In addition, business activity indices in the services and manufacturing sectors of the European Union will be published in the morning. After the meeting, ECB President Christine Lagarde will hold a press conference, and data on applications for unemployment benefits in the United States, industrial production and business activity indices in the service and manufacturing sectors will be published at the US trading session. As you can see, there will be plenty of important statistics today, and the cherry on the cake will be the ECB meeting. Thus, volatility may be high today.
We recommend you to familiarize yourself:
Overview of the EUR/USD pair. December 16. The Fed did not surprise the markets, but it continues to follow the path of tightening.
Overview of the GBP/USD pair. December 16. Boris Johnson's rating continues to fall into the abyss.
Forecast and trading signals for GBP/USD for December 16. Detailed analysis of the movement of the pair and trade deals.
Analysis of the COT report
The mood of non-commercial traders became... less bearish again during the last reporting week (November 30 – December 6). What does it mean? This means that the group of "non-commercial" traders now has more open short positions than long ones, but at the same time, the number of sell contracts (shorts) has decreased over the past week. To be precise, it decreased by 15,000, and the number of longs increased by 2,000. Thus, the net position of professional players increased by 17,000, respectively, the bearish mood became less strong. However, it was not strong, and the trend is important to us first of all. And that's just with the trend lately, everything is bad... The fact is (and it is perfectly noticeable in the chart above) that the green and red lines (net positions of non-commercial and commercial traders) have been tightly stuck near the zero level in recent months. This means that now the mood of both groups of traders is as neutral as possible. Nevertheless, all this time the European currency continues to fall, which already looks like a correlation between the actions of major market participants and the movement of the euro exchange rate. So far, this can be attributed to chance, but the bearish mood in the euro has not intensified in recent weeks and months. Thus, it is impossible to say that major players continue to get rid of the euro currency. From this point of view, it can be assumed that the downward trend is nearing its end, but at the same time you should wait for strong technical signals to start opening long positions.
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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