EUR/USD 5M

The EUR/USD pair was trading with an increase and quite volatile on Wednesday. The euro's quotes passed around 90 points during the day. Unfortunately, they showed the most trending movement at night. The pair continued to rise when the European session opened, but frequent pullbacks and corrections began. Exactly where the level of 1.1137 passed. Yesterday's macroeconomic background was expressed by two reports in the US and a speech by Christine Lagarde. The head of the European Central Bank said that "inflation should start to decline over time," but did not say why and when it will happen. Recall that oil and gas prices continue to rise, which provokes an increase in prices for almost all goods and services in the European Union. In addition, a gas war may begin between Russia and the European Union, which does not add confidence to euro bulls. However, they simply ignored Lagarde's speech. As well as ADP and GDP reports in the US.

All trading signals of the day were formed around the level of 1.1137. It is unlikely that yesterday's movement can be called a "flat", nevertheless, there were some signs of a flat. Since the first and second signals turned out to be false, the last three signals should no longer be worked out. The pair went up 20 points after the first buy signal was formed, so a Stop Loss should have been set to breakeven, at which the transaction closed. The second sell signal could not provoke a fall of the pair even by 15 points, so this deal closed at a small loss.

COT report:

In the last two months, Commitment of Traders (COT) reports have signaled such changes in the mood of traders, which absolutely did not correspond to what was actually happening in the foreign exchange market. However, in the last two weeks, COT reports have at least begun to coincide a little with what is happening in the foreign exchange market. The major players in the last reporting week greatly reduced their net position, thanks to the meetings of the European Central Bank and the Federal Reserve, the results of which were very eloquent. This week, professional traders opened 5,000 long positions and closed 38 short positions. That is, the net position has increased by 5,000 contracts. Formally, the bullish mood, which remains exactly bullish, has slightly intensified. But look at the chart of the pair's movement in the chart above: the euro does nothing but fall. In this way, the euro is now only capable of local technical corrections. Fundamental and geopolitical factors have a huge impact on the market, so we do not believe that traders now have a reason to buy the euro currency. Therefore, the non-commercial group of traders can buy euros, sell euros, all the same, with the current foundation and geopolitics, the US dollar will grow. This is due to the fact that the COT report on the euro currency does not take into account changes in demand for the dollar itself. That is, it is reasonable to assume that the demand for the US currency is growing at a faster pace than the demand for the EU currency.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. March 31. The European currency is experiencing a strong surge of optimism.

Overview of the GBP/USD pair. March 31. Boris Johnson said that sanctions against Russia should be maintained, and he himself does not see the withdrawal of troops from Kiev.

Forecast and trading signals for GBP/USD on March 31. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

On the hourly timeframe, it is even better to see that over the past two days, the European currency has grown well and overcome all the descending trend lines. However, we remind you that this growth was provoked solely by a geopolitical factor, so the upward movement may be short-lived. "Short-lived", because an agreement between Russia and Ukraine has not yet been signed, there are several issues on which there is no progress in negotiations, and hostilities continue to be conducted on the territory of Ukraine. On Thursday, we allocate the following levels for trading – 1.0901, 1.0945, 1.1036, 1.1137, 1.1234, as well as the Senkou Span B (1.1032) and Kijun-sen (1.1056) lines. The lines of the Ichimoku indicator can move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels, but no signals will be formed near them. 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 planned in the European Union for today, and reports on the number of applications for unemployment benefits and on personal income and expenses of Americans will be published in the United States. We believe that these data will have no effect on the pair's movements. Therefore, geopolitics will remain in the first place in terms of importance.

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.