EUR/USD 5M
The EUR/USD pair was trading very weakly again during the fourth trading day of the week. The volatility of the day did not exceed 40 points, so there was still no reason to count on scattered strong trading signals. If a day earlier, a small surge of emotions visited traders in the late afternoon, then on Thursday this was not the case either. But there was a report on US GDP in the second quarter in the second estimate. The time of its publication is marked with the number "1" in the chart. As you can see, this report was even worked out by the markets - as the quotes fell by 20 points! Judge for yourself how much such a movement can be considered as one of the most important indicators of the state of any economy. Moreover, the actual value did not coincide with the predicted value, therefore, traders had to react somehow. But the ambiguity of the report also played a role. The point is that the value of the previous estimate was exceeded, but the markets were waiting for a stronger value. Simply put, the actual value was higher than the previous one, but lower than the forecast. In general, there was no strong movement. As for the trading signals, only two of them were formed during the day, which, again, is not at all surprising, given the volatility. The price only reached the extremum level of 1.1750 and bounced off it twice. Traders had the right to work out both of these rebounds with a long position. In the first case, the price went up only 11 points, in the second - even 10. Thus, in the late afternoon, these long positions should have been closed at a minimum profit and left the market.
Overview of the EUR/USD pair. 27 August. Jackson Hole Symposium: "There will be no kin, electricity run out"
Overview of the GBP/USD pair. 27 August. Great Britain, America and the coronavirus
EUR/USD 1H
The hourly timeframe also clearly shows that the upward movement still retains its prospects, but at the moment its total duration is 110 points... The upward movement is the weakest and the upward trend line can be overcome at any time. We remind you that an upward trend is more preferable now, however, given the weakest volatility, we can conclude that market participants are clearly not at ease right now. Therefore, you can forget about logical movements for now. Consolidating below the trend line may provoke a resumption of the strengthening of the US currency. On Friday, we continue to recommend considering trading from important levels and lines. The nearest important levels at this time are 1.1666, 1.1704, 1.1750, 1.1805, 1.1852, as well as the Senkou Span B (1.1735) and Kijun-sen (1.1718) 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 event that traders have been waiting for from the very beginning of the week will take place on August 27. Federal Reserve Chairman Jerome Powell will deliver a speech, from whom the markets will wait for an explanation of the situation on the QE program and the timing of its winding down. It is far from certain that Powell will answer these questions. He may well not touch on the QE topic at all. That said, the second half of Friday could still see higher volatility than the average over recent weeks, even if Powell doesn't tell the markets anything. In addition, the United States will still publish a report on personal income and spending of the American population, as well as an index of personal consumption expenditures. However, these reports are unlikely to attract the attention of traders at all.
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 40 points during the last reporting week (August 10-16). Since the European currency has generally been falling in recent weeks, it is not surprising that the Commitment of Traders (COT) report showed that the bullish sentiment has weakened among professional traders. This is clearly seen on the first indicator, which has been showing a weakening of bullish sentiment since February. The green and red lines are narrowing, indicating the end of the upward trend. However, the upward trend itself cannot be considered complete yet, and the latest COT report allowed the green line (the net position of the "non-commercial" group of traders) to start increasing. This means that the bullish mood among the major players is strengthening again, so it is possible that a new upward trend will start in the near future. The second indicator also signals an increase in the net position. It clearly shows that the volume has grown, and accordingly the likelihood of a new appreciation of the euro is increasing. Professional traders opened 21,600 buy contracts (longs) and closed 4,400 sell contracts (shorts) during the reporting week. Thus, the net position grew by 26,000 at once, which is a lot even for the euro currency. However, as we can see, in the next few days the euro resumed its decline, so the new COT report may already show a decrease in the net position. In any case, as the bullish sentiment persists, as the total number of open contracts for buying from non-commercial exceeds the total number of contracts for selling. Therefore, we continue to expect the upward trend to resume.
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.