EUR/USD 5M
The EUR/USD pair moved in a very accurate manner on March 12, from a technical point of view. Overnight trades, as usual, were calm, although somewhere in the middle of the Asian session, the pair began a downward movement, which later continued for most of the day. The price reached the extreme level of 1.1991 five times at night, but never worked it out. Traders could work out this signal (rebound), as we all know that a rebound is not always clear and accurate. However, since this signal was formed at night, it could well have been missed. The next signal was formed in the morning, literally an hour before the opening of the London Stock Exchange. The price has overcome the extremum level of 1.1952, therefore, in the place of the first golden rectangle, it was possible to open short positions. The target was the Kijun-sen line, which was reached during the European trading session. Thus, traders could earn about 30 points on this signal. Furthermore, a rebound followed from the critical line, which could also be interpreted as a buy signal. The formation of this signal coincided with the publication of the report on industrial production in the European Union (figure 1), which turned out to be better than the forecasted values. However, despite the fact that after this signal was formed, the euro rose by 28 points, we do not believe that this particular report triggered the movement. Then the pair returned to the critical line and performed a second rebound from it, which could be used to open long positions again. Longs were either closed by Stop Loss at zero (when 15-20 points were passed in the right direction, it is recommended to set Stop Loss to breakeven), or they continued to remain open, but since the price did not go below Kijun-Sen, in any case after a rebound, traders should have had open longs. The immediate target - the same level of 1.1952 - was worked out, which brought traders another 25 points of profit. Thus, in total, about 50-60 points could be earned per day, which, given not the highest volatility, is an excellent result. The US consumer confidence report (number 2) did not generate any reaction from the markets.
EUR/USD 1H
On the hourly timeframe, we can see that the rising trend line was surpassed on Friday, but the bears were unable to overcome the next support - the Kijun-sen line. Thus, the upward trend line has lost its relevance, but the upward trend remains relevant. No important macroeconomic publications scheduled for Monday, both in the United States and the European Union. Thus, traders will have nothing to react to during the day. Unless the rate of return on Treasury bonds in the United States will start to grow again, which can provoke a new round of growth for the dollar. If the Kijun-Sen line is overcome, it will be a serious signal for a new round of the fall of the EUR/USD pair in the long term. In general, you are advised to continue trading from important levels and lines that are plotted on the hourly timeframe. The nearest levels are 1.1952 and 1.1991, as well as the Kijun-sen line. Signals can be "rebounds" and "breakthroughs". Do not forget about placing a Stop Loss order at breakeven if the price moves 15-20 points in the right direction.
COT report
Recall that the EUR/USD pair fell by 200 points during the last reporting week (March 2-8), which is quite a lot for it. However, in general, even with such a fall, the upward trend is still visible to the naked eye. Thus, so far, there is still no need to talk about an unambiguous change in the trend to a downward one on a global scale. Let us remind you that in recent weeks the mood of major market players has become much more bearish, as the total number of buy contracts (longs) decreased by 20,000, and sell contracts (shorts) increased by 30,000. If earlier there was a threefold difference between these figures, now it is already two times with an advantage of the former. In other words, over the past five weeks, professional traders have begun to believe less that the euro's growth will continue. As for the reporting week, the "non-commercial" group of traders continued the trend of the last weeks. Major players closed 14,000 buy contracts and opened 12,000 sell contracts during this week. Thus, the net position for this group of traders increased immediately by 26,000, and the mood of the group became much more bearish. The latest COT reports speak almost unambiguously in favor of the market sentiment changing to a downward one. Indicators also signal a very likely reversal of the previous trend, as the green and red lines of the first indicator continue to move towards each other. From our point of view, only one global factor can prevent this - this is the factor of a new potential growth of the money supply in the United States by $2 trillion.
Explanations for illustrations:
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.