EUR/USD 5M

The EUR/USD pair was not traded very actively on Monday. Volatility was only 60-70 points, which is quite low in the current conditions. The pair was in an upward movement for most of the day, but what does it matter if at the end of the day it still remained inside the horizontal channel of 1.0120-1.0269? The pair had very real opportunities to settle above the horizontal channel, but look how the pair behaved near its upper border! The pair approached it twice and the movement simply died both times. Therefore, we cannot yet draw any other conclusions than those that were voiced earlier. Namely: the flat remains, the euro's further growth is a big question. By the way, several macroeconomic reports were published yesterday, which traders gladly ignored. In fairness, take note that they were not so important as to provoke an exit from the horizontal channel, since even the meetings of the Federal Reserve and the European Central Bank could not do it. Indices of business activity turned out to be extremely "insipid".

As for trading signals, only two of them were formed during the day. At first, the pair rebounded from the level of 1.0269 and went down about 30 points, which was enough to set Stop Loss to breakeven, but it was not possible to get a profit on the short position, since the nearest target level - the Kijun-sen line - was not reached. Then the pair returned to the level of 1.0269, but as of Monday evening it was not even clear whether it had rebounded from it or overcome it? Most likely, neither one nor the other.

COT report:

Commitment of Traders (COT) reports on the euro over the past six months have raised a huge number of questions. The chart above clearly shows that for most of 2022 they showed a blatant bullish mood of commercial players, but at the same time, the euro was falling. The situation has changed at this time, but NOT in favor of the euro. If earlier the mood was bullish, but the euro was falling, now the mood is bearish and... the euro is also falling. Therefore, for the time being, we do not see any grounds for the euro's growth, because the vast majority of factors remain against it. During the reporting week, the number of long positions increased by 2,100, and the number of shorts in the non-commercial group increased by 1,000. Accordingly, the net position increased, but only by 1,000 contracts. The sentiment of the big players remains bearish and has continued to pick up in recent weeks. From our point of view, this fact very eloquently indicates that at this time even commercial traders do not believe in the euro. The number of longs is lower than the number of shorts for non-commercial traders by 41,000. Therefore, we can state that not only the demand for the US dollar remains high, but also the demand for the euro is quite low. This may lead to a new, even greater fall of the euro. In principle, over the past few months or even more, the euro has not been able to show even a tangible correction, not to mention something more. The maximum upward movement was about 400 points.

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EUR/USD 1H

The pair continues to trade between the levels of 1.0120 and 1.0269 on the hourly timeframe. Thus, the flat remains and may continue for some time. Ichimoku indicator lines are not strong right now. Signals can still be formed around them, but you should understant that the pair is now in a flat. We highlight the following levels for trading on Tuesday - 1.0000, 1.0072, 1.0120, 1.0269, 1.0340-1.0366, 1.0485, as well as Senkou Span B (1.0111) and Kijun-sen lines (1.0186). Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. No important reports will be published in the European Union and the United States on August 2. Thus, it is more likely that the pair will remain within the horizontal channel. However, overcoming its upper limit can happen without important statistics or "foundation".

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.