FX.co ★ Forecast and trading signals for EUR/USD for March 21. Detailed analysis of the pair's movement and trade deals. Euro fell into a triangle

EUR/USD 5M

During the last trading day of the week, the EUR/USD pair could not confidently overcome the extreme level of 1.1122, which is the last local high. Therefore, even though the downward trend line has been overcome, so far it is not possible to talk about the euro's succeeding growth. But a new descending trend line (hourly TF) was formed, which now supports bulls. And together, both trend lines form a triangle. Of course, it is better to consider the level of 1.1122 as the upper limit, and not the descending trend line that has been broken. The 1.1122 level keeps the bulls from developing their own success. There were no important reports or events either from the US or the EU last Friday. Therefore, traders had nothing to react to during the day, but the volatility of the pair was still quite high, more than 100 points.

As for trading signals, only one was generated during the day. Although there was a very good trend movement on Friday, but the sell signal was formed at night, and even then with an error of several points. At the time of the opening of the European trading session, the price had already moved quite far from the level of 1,1122, so it was not possible to open a short position. We had to wait for the signal until the beginning of the US session, when the price perfectly reached the critical line and bounced off it. Therefore, traders could buy the pair here. This deal eventually brought about 40 points of profit.

COT report:

In the last two months, Commitment of Traders (COT) reports have signaled such changes in the mood of traders that absolutely did not correspond to what was actually happening in the foreign exchange market. Simply put, the euro continued to fall, while big commercial traders raised long positions. We said that such a divergence could arise due to the fact that the demand for the US currency increased sharply, which was simply higher than for the euro. However, the latest COT report showed that big players are also starting to change their preferences. During the last reporting week, the non-commercial group reduced the number of long positions by 40,000. That's a lot. The general mood of non-commercial traders still remains bullish, as the number of long positions exceeds the number of short positions by 19,000. However, trends are important to us. And now the trend is such that even major players can start selling the euro again. This is on top of the fact that the demand for the US dollar also remains high. Thus, the net position of the non-commercial group decreased significantly last week and now almost all factors speak in favor of a further fall in the euro currency. Therefore, the euro can now show growth from time to time only on the basis of technical necessity to adjust.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. March 21. What does the new week have in store for us?

Overview of the GBP/USD pair. March 21. The British pound also feels bad.

Forecast and trading signals for GBP/USD on March 21. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

On the hourly timeframe, as already mentioned, there are now two trend lines and an important level of 1.1122. We believe that a new trend should be determined by overcoming the level of 1.1122 or by overcoming the ascending trend line. At the same time, at the moment everything looks as if it is the ascending trend line that will be overcome. The euro's growth is rather weak and uncertain, and most factors speak in favor of a new growth of the US dollar. On Monday, we allocate the following levels for trading - 1.0901, 1.1122, 1.1234, as well as the Senkou Span B (1.0974) and Kijun-sen (1.1032) 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. No important events or publications planned in the European Union and the United States on March 21. But there will be two important speeches - European Central Bank President Christine Lagarde and Federal Reserve Chairman Jerome Powell. Although we do not believe that both functionaries will tell the markets anything important, since meetings of both central banks have recently been held, nevertheless, this probability cannot be completely excluded.

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.