FX.co ★ Forecast and trading signals for EUR/USD for March 4. Detailed analysis of the pair's movement and trade deals. Euro is sliding down again

EUR/USD 5M

The EUR/USD pair began to move down again during the penultimate trading day of the week. Thus, the geopolitical background continues to exert significant pressure on risky currencies and on all markets in general. There were interesting macroeconomic reports during the past day, but, as we warned, they were ignored by the market. Therefore, it doesn't even make any sense to break them down. Now it doesn't really matter how much the Federal Reserve will raise the key rate on March 16, how many times the rate will be raised in 2022 and when the European Central Bank wakes up. Only geopolitics matters now. And the dollar continues to rise in price thanks to it. Even Fed Chairman Jerome Powell's speech was only able to put pressure on the dollar for a short time, after which its growth resumed.

There were practically no trading signals on Thursday. We can only pay attention to one signal – to sell – at the very beginning of the European trading session. The price rebounded from the level of 1,1105, after which it went down 40-50 points. This is how much traders could earn on this signal, since the price did not meet either the level or the line on its way, therefore the transaction should have been manually closed in the late afternoon. Thus, the absence of a large number of trading transactions did not prevent traders from making money.

COT report:

The new Commitment of Traders (COT) report, which was released on Friday, showed a new strengthening of the bullish mood among professional traders. This time, the "non-commercial" group closed about 17,000 contracts for short positions on euros and 5,500 long positions. Thus, the net position increased by 12,000, which is clearly visible on the second indicator in the chart above. The total number of long positions exceeds the number of short positions by 60,000, so now we can really say that a new upward trend is beginning to form. It would be possible to say, if not for one "but". The European currency is not growing. It does not rise even at a time when there seem to be "corrective" grounds for this. Recall that the euro currency has been getting cheaper in one way or another for 14 months. It does not grow even when the participants of the foreign exchange market themselves increase their long positions. It seems that geopolitics really remains in the foreground, so COT reports in some way lose their significance. Remember, when the Federal Reserve was actively pumping its economy with dollars, the data from the COT reports also did not always coincide with the trend in the market itself. This was because the money supply in the US was growing very fast, so it was not always important what actions the players in the market were taking. The "Fed factor" was more important. And now the factor of geopolitics is more important.

We recommend that you familiarize yourself with:

Overview of the EUR/USD pair. March 4. Jerome Powell failed to disappoint the market. The dollar is rising again.

Overview of the GBP/USD pair. March 4. Britain continues to exert sanctions and pressure on Russia.

Forecast and trading signals for GBP/USD on March 4. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

The downward trend persists on the hourly timeframe, and this is clearly visible, even without a corresponding trend line. Thus, the price may continue to fall in the coming days. Let's pay attention to the fact that since the beginning of the war in Ukraine, the price has not even approached the trend line. This suggests that the bears' positions are extremely strong now, and the bulls do not even have enough strength to correct. We allocate the following levels for trading on Friday – 1.0990, 1.1057, 1.1144, 1.1234, 1.1274, 1.1321, 1.1391, as well as the Senkou Span B (1.1251) and Kijun-sen (1.1152) lines. There are also support and resistance levels, but no signals will be formed near them. The lines of the Ichimoku indicator may change their position during the day, which should be taken into account when searching for trading signals. Signals can be "bounces" and "breakthrough" levels - extremes and lines. Do not forget about placing a Stop Loss order at breakeven if the price went in the right direction of 15 points. This will protect you against possible losses if the signal turns out to be false. The European Union is set to only publish a report on retail sales on March 4, which is unlikely to interest anyone. Thus, traders should focus all their attention on the NonFarm Payrolls report, which will be published in the afternoon. Also, data on unemployment and wages will be released in America, but they will clearly be in the shadow of the Nonfarm report. And the Nonfarm data can be in the shadow of geopolitics...

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.