FX.co ★ Forecast and trading signals for EUR/USD on August 11. Analysis of the previous review and the pair's trajectory on Wednesday

EUR/USD 5M

The EUR/USD pair showed absolutely no interesting movement on Tuesday. The pair's quotes were decreasing throughout the day, but they did it so slowly that it is somehow not necessary to talk about a trend movement during the day. The most interesting thing is that when looking at the hourly timeframe, one gets the impression that the pair has developed a rather strong downward trend and the price is confidently moving down. But in reality, this is not at all the case. Since this week's opening on Monday night, the pair has moved down 40 points, with total volatility of 58 points over two trading days. On average, this is 30-35 points per day. And so, we still draw your attention to the fact that it is extremely difficult to trade with such volatility, and trading signals are either generated very rarely, or in batches near some one level or line, along which the pair begins to trade in absolute flat. There was not a single important macroeconomic report or fundamental event in the European Union and the United States yesterday, so there was nothing for traders to react to during the day. But in any case, not a single trading signal was generated on Tuesday, so traders should not have opened a single trade deal. The price simply did not cross a single important level or line during the day.

Overview of the EUR/USD pair. August 11. The hawkish statements of the Fed board members continue to support the dollar.

EUR/USD 1H

The technical picture looks a little more interesting on the hourly timeframe. First, the upward trend has been canceled (the price has settled below the upward trend line), which means that now we can count on a downward movement from the pair. Secondly, the quotes dropped to the lows of July 19-23 and managed to overcome them, but at the same time they immediately reached the March 31 local low near the 17th level, which we called the target within the current downward movement. That is, the likelihood that an upward reversal will follow today or tomorrow remains high. In general, we continue to expect a new round of depreciation of the US currency, despite strong reports on the labor market and unemployment. However, since it's still a downward trend on the hourly timeframe, short positions on the EUR/USD pair should be considered to a greater extent. On Wednesday, we still recommend trading from important levels and lines. The nearest important levels at this time are 1.1704, 1.1756, 1.1852, 1.1894, as well as the Senkou Span B (1.1833) and Kijun-sen (1.1805) 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 only important report on Wednesday will be the US CPI for July. Remember that inflation is the most controversial indicator, the reaction to which can be almost absolutely any. Therefore, whatever the meaning of the report is when it is published, extra care will be required.

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 70 points during the last reporting week (July 27 – August 2). At the same time, the Commitment of Traders (COT) report for this week showed minimal changes in the mood of major players. During this period of time, the "non-commercial" group closed 3,000 buy contracts (longs) and 500 sell contracts (shorts). Thus, the net position for non-commercial traders decreased by another 2,500, and the mood of major players became even less bullish. Less bullish and not more bearish because at the moment, professional players still have more open buy contracts than those for selling. Thus, the global upward trend, which we talk about very often, can still resume at any moment. Pay attention to the chart above. At the moment, the quotes have not even been able to fall to their previous local low on the 24-hour timeframe. That is, at the moment it is not even possible to say that a new downward trend has begun. Everything still looks as if the pair is simply correcting against a long-term upward trend. And this correction may end in the near future. We remind you that the US currency continues to be negatively affected by the factor of the Federal Reserve's injection of billions and trillions of dollars into the economy, which inflates the money supply in the country and provokes an increase in inflation. Thus, the dollar may depreciate due to this factor, and the European currency – due to the factor of sales by its major players. The question is which of the currencies will become cheaper faster. So far, both indicators show very well what is happening with the euro/dollar pair. As you can see, when the pair decreases, the net position of major players also decreases (the second indicator), and vice versa.

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.