5M chart of EUR/USD
On Monday, EUR/USD quietly started a new round of upward movement, despite overcoming the ascending trend line. So far this movement can be considered as an upward pullback, but settling above the critical line is likely to restore the uptrend. Once again, we're facing a situation where the euro might be rising for no reason. Yesterday, there were no important events or reports in the US and the EU. In our fundamental articles, we tried to explain why the pair might continue rising (which does not seem logical), but it does not change the fact that the upward movement still looks strange in any time frame. Thus, a rebound from the Kijun-Sen line can still provoke the fall, but the USD has been feeling out of place lately.
There is not much to say about Monday's trading signals. During the European trading session, the pair started "dancing" near 1.0762, having formed several false signals. So traders could try to use the first two, which didn't bring them any profit, just a loss. Although, the loss was not as big as to how low volatility was during the day. But then again it was still a loss. Unfortunately, if the movement is weak or it moves up or down like a swing, then you can't expect any profit...
COT report:
On Friday, the new COT report for March 21 was released. The Commodity Futures Trading Commission has caught up with the lost time and has now released reports exactly on time. In the last few months, the picture was completely consistent with what was happening in the market. On the chart above, we see that the net non-commercial position of large traders (second indicator) has risen since September 2022. At about the same time, the euro started to rise. The net non-commercial position is bullish and only started to fall during the last couple of weeks, which coincides with the euro's decline. I have already drawn your attention to the fact that a fairly high value of the "net position" allows us to expect the uptrend to stop shortly. Such a signal comes from the first indicator, with the green line and the red line being far apart, which is usually a sign of the end of a trend. The euro has already started to fall, but we don't know if it's just a bearish correction or a new downtrend. According to the latest report, non-commercial traders closed 6,500 long positions, while the number of short ones decreased by 11,300. Consequently, the net position rose by 4,800. The number of long positions exceeds that of short ones by 145,000. In any case, a correction has been looming for a long time. Therefore, even without reports, it is clear that the downtrend will continue.
1H chart of EUR/USD
On the one-hour chart, EUR/USD had been rising for six straight days, entered a correction, but is now heading upwards again. So far, the price is above the Senkou Span B line, but below the Kijun-Sen. The nearest target is the Senkou Span B line. However, overcoming the critical line will bring back the bulls to the market, and with a completely empty calendar of events, the euro can resume growth. Therefore, all hope is on the Kijun-Sen. On Tuesday, important levels are seen at .0537, 1.0581, 1.0658-1.0669, 1.0762, 1.0806, 1.0868, 1.0938, 1.1033, 1.1137-1.1185 as well as the Senkou Span B (1.0723) and Kijun Sen (1.0823) lines. Ichimoku indicator lines can move intraday, which should be taken into account when determining trading signals. There are also support and resistance although no signals are made near these levels. They could be made when the price either breaks or rebounds from these extreme levels. Do not forget to place Stop Loss at the breakeven point when the price goes by 15 pips in the right direction. In case of a false breakout, it could save you from possible losses. On March 28, there are no important events or reports planned in the European Union or the United States. There's nothing to react to, so it is likely that we will have a weak movement, which will be very difficult to work out. We are focusing on the "technique" again.
Indicators on charts:
Resistance/support - thick red lines, near which the trend may stop. They do not make trading signals.
Kijun-sen and Senkou Span B are the Ichimoku indicator lines moved to the hourly timeframe from the 4-hour timeframe. They are also strong lines.
Extreme levels are thin red lines, from which the price used to bounce earlier. They can produce trading signals.
Yellow lines are trend lines, trend channels, and any other technical patterns.
Indicator 1 on the COT chart is the size of the net position of each trader category.
Indicator 2 on the COT chart is the size of the net position for the Non-commercial group of traders.
