EUR/USD 5M
The EUR/USD pair was trading very chaotic on Monday, as it should on that day, when the calendar of macroeconomic events is completely empty. However, this judgment also applies to Tuesday and Wednesday. Traders can use macroeconomic reports on Thursday. However, as we can see, the pair is not going to stand still until Thursday, although it is trading in the most inconvenient way for traders. Today it became known for certain that the G7 countries have concluded an agreement on the introduction of a single corporate tax for large multinational companies. This means that now wherever the business of any large corporation is located, it will pay a single profit tax to the treasury of the country where its head office is located. That is, if Nike, an American firm, sells sneakers somewhere in Cyprus where tax rates are low, it will still pay 15% of the profits to the US budget. Technically, this is bad news for the dollar. In fact, this is bad news for any currency. We cannot say for sure that the markets reacted to this information yesterday. However, the dollar fell in value. The pair traded in an unappealing manner during the European trading session, initially forming a false sell signal near the level of 1.2160, and then traded along this level for six hours. A short position on the first signal brought an 11-point worth of loss. The second signal (only a formal one) should not be worked out at all, since all the signs of an intraday flat were present. Also, during the US trading session, another buy signal was formed through a breakthrough of the Kijun-sen line. This signal could be worked out with a long position, and later the quotes of the pair reached the Senkou Span B line, which brought traders the same 11 points that they lost on the first trade. This position should have been manually closed, since the moment when the pair reached the Senkou Span B line was the end of the working day. In general, not the most successful day in terms of trading, but it's good that there were no losses.
Overview of the EUR/USD pair. June 8. Janet Yellen sentenced the dollar?
Overview of the GBP/USD pair. June 8. The G7 countries have signed an agreement on a single corporate tax.
EUR/USD 1H
The euro/dollar pair initially returned to the critical line on the hourly timeframe, and then crossed it and, at the same time, the downward trend line, for which there was no particular hope. Thus, the pair continues to remain in a kind of flat, while not very similar to a flat. However, the fact that the quotes are in a very narrow price range is a fact. In the coming days, traders may try to return the pair to the 1.2243-1.2267 range, but will they have the strength to surpass it this time? Considering that the calendar of macroeconomic events contains nothing. On Tuesday, we still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels at this time are 1.2104, 1.2160, 1.2213 and 1.2243, as well as the Senkou Span B (1.2199) and Kijun-sen (1.2180) 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 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. No important publications and reports are scheduled for Tuesday in the US, and in the EU, the GDP level for the first quarter in the second estimate, as well as the index of business sentiment from the ZEW institute, will be published. One could assume that the markets will react to GDP, but this will only happen if the actual value is very different from the previous estimate, which is unlikely. So today we may not see the most pleasant movements for trading.
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 25 points during the last reporting week (May 25-31). The new Commitment of Traders (COT) reports showed that professional traders continue to build up buy positions in the European currency. This time they opened only 751 new Buy contracts, but closed 3,900 Sell contracts. Thus, the net position for this group of traders increased again, by 4,600. The bullish mood of professional traders is getting stronger, which can be clearly seen from the second indicator in the chart above, which reflects the changes in the net position for the "non-commercial" group. We see that this indicator has been constantly growing since mid-April, increasing the likelihood of further strengthening of the European currency. We have already said that the actions of the Fed and the US Congress are now simply blocking the actions of players in the foreign exchange market. Simply because professional traders make deals in both directions, and the Fed and the US authorities are constantly pouring new hundreds of billions of dollars into the economy. Therefore, the dollar is declining, despite the actions of the participants in the foreign exchange market. It seems that in recent months, players realized what they would have to work with in 2021, and simply followed the trend, not wanting to compete with the Fed. As a result, in early April, judging by the first indicator, a new round of the upward trend began.
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.