EUR/USD 5M
Yesterday, the EUR/USD pair traded extremely calmly after Friday's "flight". Thus, there were not a lot of trading signals on Monday. Generally speaking, the market was recovering after Friday's movement, although it cannot be said that there was a correction. Rather, a sideways or flat movement was simply observed. No macroeconomic reports during the first trading day of the week, and not a single important event either. However, Friday events and reports were enough. It is good that the markets reacted to the US macroeconomic reports in an accurate and clear manner, and most importantly, it was logical (as opposed to what is happening now with the pound/dollar pair). Thus, it was possible to make good money on Friday. Yesterday, it was hardly possible to make money. Both signals of the day were formed near the extremum level of 1.2145 in the European trading session. If the price initially overcame this level, forming a sell signal, then it settled above it in 10-20 minutes, forming a buy signal. Obviously, the first signal was then false and traders lost 11 points. On the second signal, it was necessary to open long positions with the target - the nearest next level 1.2190. However, the bulls could not bring the pair to this level, so the deal had to be closed manually or wait until it closes itself by Stop Loss (breakeven) or Take Profit. Monday's volatility was only about 40 points, so there should be no question as to why trading was so sluggish and unprofitable.
EUR/USD 1H
On the hourly timeframe, you can clearly see that after Friday's growth, the EUR/USD pair did not begin to correct and could not settle below the level of 1.2145, from which it rebounded. However, it also could not leave the area above the high of 1.2177, so a flat was observed all day. In general, everything continues to go according to plan, since we have repeatedly said that the pair has much more chances to resume the upward trend in the long term and update the 2.5-year highs. It seems that this is exactly what is going on. The dollar continues to be in serious trouble as the US money supply continues to swell. Thus, we still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels at this time are 1.2113, 1.2145, 1.2175 and 1.2190. The Senkou Span B and Kijun-sen lines are too far away at this time. 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 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. No major macroeconomic reports scheduled for Tuesday in both the United States and the European Union. In America, there will be speeches by Fed officials John Williams, Lael Brainard, Mary Daley and Rafael Bostic, but they are unlikely to cause a serious reaction.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair fell by 20 points during the last reporting week (April 27-May 3). During the same time, a group of non-commercial traders opened 7,000 buy contracts and 6,000 sell contracts. Thus, the net position increased over the reporting week by only 1,000 contracts, which is very, very little for the European currency. Thus, the new COT report, it can be considered, did not record any changes. But in general, the situation with the European currency remains rather strange. One might say that the upward trend in the euro has resumed, but professional traders do not observe an increase in long positions. The first indicator in the chart perfectly shows this. Moreover, since last September, the upward trend, according to the COT reports, is drying up and losing its bullish momentum. However, in fact, all this time, the upward movement continues, so the data from the COT reports now does not quite accurately reflect what is happening on the market. The second indicator shows that the net position of non-commercial traders has been falling since last September. But if major players reduce the number of euro longs and increase the number of shorts, then the euro should decline. But in fact, it is not decreasing. We have only one explanation for this: the continued growth of the US money supply. Since the number of dollars is constantly growing, no matter what the actions of large players in the foreign exchange market, they simply cannot block the actions of the Federal Reserve. The dollar supply is constantly increasing, so even if large players are also constantly selling euros, the euro is still growing. Such is the paradox, but over the past year we have seen many paradoxes and illogicalities. One has only to look at the chart of the movement of the pound...
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.