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EUR/USD 5M
The volatility for the EUR/USD pair was very weak again and reached 46 points on Tuesday. This is despite the fact that a very important inflation report was published in the United States yesterday. There was a reaction to this report, it should be noted, however, that the pair initially went up 40 points, and then fell by almost the same amount, so there was no effect from the inflation report in the end. The consumer price index fell by the end of August, but by only 0.1%. Core inflation slowed down by 0.3%. Thus, one could say that the dollar's fall after these reports were published is quite logical, if in the next few hours there was no movement in the opposite direction, after which the pair ended up exactly where it all began. Now for the trading signals. Three of them were formed during the past day and all turned out to be false, running ahead. The first signal was not only false, but also inaccurate. Thus, traders could safely ignore it - the price spent nearly two hours near the Kijun-sen and Senkou Span B lines. Nevertheless, if anyone opened a short position, then they did not receive a loss on it, since the pair went down more than 15 points, so the Stop Loss should have been set at breakeven. The second buy signal should not have been worked out, as it was formed exactly at the time when the US inflation report was published. The third sell signal should not have been worked out either, since at that time two false signals had already formed near the Kijun-sen and Senkou Span B lines. In principle, since the volatility remained very weak yesterday, it is not surprising that false signals were formed.
Overview of the EUR/USD pair. September 15. US inflation has not given a clear answer to the main question.
Overview of the GBP/USD pair. September 15. Scotland is still talking about an independence referendum.
EUR/USD 1H
The euro/dollar pair broke through yesterday's updated trend line on the hourly timeframe. At least the breakdown happened, which can be interpreted in different ways. It happened when strong reports from the US were published, so it can easily be false. Senkou Span B and Kijun-sen lines, in turn, also did not constitute any obstacle to the bulls. As a result, a very confusing situation has turned out when there are simply no clear signals and a clear trend. On Wednesday, we continue to draw traders' attention to important levels and lines - 1.1750, 1.1805, 1.1857, 1.1894, as well as the Senkou Span B (1.1822) and Kijun-sen (1.1810) lines. The Ichimoku indicator lines can change their position 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 US and the European Union are set to publish reports on industrial production on September 15. However, if yesterday, traders responded with long positions by 37 points to the most important report on inflation, then we can expect a reaction by a maximum of 20 points to the report on industrial production.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair increased by 75 points during the last reporting week (August 31 - September 6). But the Commitment of Traders (COT) reports, which for several months in a row signaled a decrease in the net position of non-commercial traders, just before level 0 (the first indicator) stopped selling the European currency. That is, at this time the number of open long and short positions in the "non-commercial" group is practically the same, which indicates the neutral mood of this group. Formally, it remains bullish, since a slightly larger number of buy contracts (longs) are still concentrated in the hands of large players, but this advantage is small. Thus, the COT reports do not currently answer the most important questions. Namely: will the bears be able to overcome the 1.1700 level to try to form a downward trend? Are the bulls ready to start forming a new upward trend? During the reporting week, professional traders closed less than a thousand Buy contracts (longs) and 16.5 thousand Sell contracts (shorts). Thus, the net position grew by 15,000 at once, and the mood became a little more bullish. However, one should not forget about the Fed factor as well. Let us remind you that if money injections into the American economy continue, this will further lead to an increase in the money supply and to natural inflation of the dollar. That is, no matter how the players get rid of the European currency, if the Federal Reserve continues to print $120 billion a month, this will not lead to a strong dollar growth and, rather, vice versa. Take note that the stock market is growing rapidly at this time. This means that most of the money that came into the economy from the Fed flows into the stock market. If investors stop buying shares, this could lead to an excess of free money supply, which will provoke a new fall in the dollar.
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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