EUR/USD 5M
The EUR/USD pair continued its downward movement on Wednesday, which began a couple of days ago. All with the same volatility equal to 40 points. To be more precise, such volatility was recorded during the day. That is, from the beginning of the European session to the middle of the American one. On the whole, the pair passed from a minimum to a maximum of 50 points during the day, which does not change the essence of the matter. During the whole day, not a single important report was published in the United States and the European Union. Not a single important event. The downward movement continued throughout the day, but, unfortunately, it began before the opening of the European trading session. And, in fact, the only trading signal of the day was formed at night. It was at this time that the price ideally bounced off the critical Kijun-sen line, which lies at the level of 1.1851, and during the day dropped to the support level of 1.1804, from which it also rebounded. But, unfortunately, most traders sleep at night, so it is unlikely that they had the opportunity to work out this signal. Not a single signal was generated during the day.
Overview of the EUR/USD pair. September 9. US inflation is the last frontier before the Fed meeting.
Overview of the GBP/USD pair. September 9. Scotland will make every effort to hold the referendum by the end of 2023.
EUR/USD 1H
The euro/dollar pair continues its downward movement and yesterday, it managed to drop to the Senkou Span B on the hourly timeframe. However, it is still far from overcoming the Ichimoku cloud. Recall that the pair retains low volatility, which does not allow counting on a strong movement. Although, oddly enough, the euro/dollar pair does not stand still and is almost constantly in a trend movement. Thus, the downward correction continues at this time, but we expect the uptrend to resume. On Thursday, we continue to draw traders' attention to important levels and lines - 1.1750, 1.1797, 1.1857, 1.1894, as well as the Senkou Span B (1.1817) and Kijun-sen (1.1871) 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 15-20 points in the right direction. This will protect you against possible losses if the signal turns out to be false. Perhaps the most important event of the week will take place in the European Union on September 9. The results of the next meeting of the ECB will be summed up. This is an interesting development considering we haven't heard European Central Bank President Christine Lagarde's speeches in about a month. There is a hope that something has changed in her vision, and the ECB may change something in the parameters of monetary policy. In any case, this is a very interesting event, and it can provoke a reaction from the markets. Things will be much more boring in the States. Today, only the report on applications for unemployment benefits will be published, which practically no one is interested in, as well as speeches by several members of the FOMC.
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 50 points during the last reporting week (August 24-30). However, despite the fact that the European currency has been growing for two weeks now, the Commitment of Traders (COT) reports continue to signal a reduction in the net position of non-commercial traders, which can only indicate a weakening of the bullish sentiment. The net position of the "non-commercial" group has already dropped to almost zero, which means almost complete equality in the number of open contracts for longs (buying) and shorts (selling) of big players. If we draw the most banal conclusion, then the major players are now looking towards selling the euro. But, as we have already said many times, during such a serious weakening of the bullish sentiment, the EUR/USD pair dropped only 600 points. Recall that the entire upward trend is valued at 1,700 points. So for now, we can only draw the same conclusion as before: big players may be inclined to sell off the euro, but the cash infusions from the Federal Reserve, which have not yet stopped, continue to level the imbalance in supply and demand for the European currency. Simply put, the Fed continues to inject hundreds of billions of dollars into the economy, corny increasing the supply of the dollar in the foreign exchange market and provoking a rise in inflation. Therefore, commercial players can sell off the euro, but the money supply of the dollar is growing at about the same rate (or even more), which leads to a very modest fall of the euro against the dollar, which can end at any moment. The "non-commercial" group opened 11,000 new contacts for shorts during the reporting week, and the total number of Buy and Sell contracts is now in the ratio of 192.5 thousand - 180.5 thousand.
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.
