EUR/USD 5M
The EUR/USD pair was trading very calmly on Tuesday. Volatility of the day was slightly more than 50 points, which is not much even for the euro. So, as usual, when we see such volatility, it was extremely difficult to make money. The problem is that when volatility is low, it is almost guaranteed that the pair cannot reach the nearest target level. Thus, either traders need to close trades manually, or not trade at all. It is almost impossible to predict if the following day will also show low volatility. It is only possible to adjust to market conditions during the day. Apart from low volatility, important macroeconomic reports for the EUR/USD pair were not published during the day. No important fundamental event. Traders still attempted to continue the upward movement at the European trading session, but very quickly abandoned this and half of the European session, and almost the entire US session was almost sideways. Thus, despite the fact that the upward trend does not cause any doubts, it was very, very problematic to make money yesterday. In total, two signals were generated on the 5-minute timeframe. The first - to buy - the price crossed the extreme level of 1.2243 in the morning, after which it managed to go upwards by 14 points, which was not enough even to set Stop Loss to breakeven. Thus, this deal should have been closed manually during the day, since the price subsequently could not settle below the level of 1.2243, which could serve as a signal to close the longs. The second signal was formed near the same level (1.2243) in the form of a rebound from it. However, since the pair was in a blatant flat for half a day before, this signal should not have been worked out anymore. Thus, during the past day, traders could have received several points of loss.
Overview of the EUR/USD pair. May 26. The central banks of Great Britain, the United States and the European Union will raise rates simultaneously and not soon.
Overview of the GBP/USD pair. May 26. Bank of England: lower rates... no, we'd better raise... no, let's leave everything as it is!
EUR/USD 1H
The upward trend persists on the hourly timeframe, and the pair left the horizontal channel after staying for five days in it. However, as we have already said, it could not go far higher, therefore the upward trend persists, but it does not make it easier to trade. The last two days have not been the most successful in terms of trading. But in general, the euro retains excellent chances for sustaining the upward movement. We regularly talk about the reasons in our fundamental articles, we recommend that you familiarize yourself. At least until the pair settles below the trend line, we do not expect the dollar to firmly strengthen. Today, we still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels at this time are 1.2160, 1.2190, 1.2243 and 1.2267, as well as the Senkou Span B (1.2147) and Kijun-sen (1.2213) lines. The Ichimoku indicator lines can move 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. There are no major events or reports that are set to be released in the European Union on Wednesday. It's the same in the United States. Thus, the pair's movement can be indistinct and nondescript, with low volatility. At the slightest sign of a flat, it is recommended not to enter the market.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP/USD pair.
COT report
The EUR/USD pair rose by only 20 points during the last reporting week (May 11-17). The new Commitment of Traders (COT) reports, which was released yesterday in the US, showed that professional traders continue to build up buy positions in the European currency. A total of 10,700 Buy contracts (longs) and 1,600 Sell contracts (shorts) were opened. Thus, the net position increased by another 9,000 contracts. Take note that a few weeks ago the "non-commercial" group of traders, which is considered the most important of all, began to increase purchases of the euro again. We have repeatedly said that we believe the main reason for the euro's growth and the greenback's fall is the flooding of the American economy with dollars. But the COT reports show that the big players are also joining the trend, which is not in their power this time, but in the power of the Federal Reserve and the US government. One way or another, but the demand for the euro is growing, the supply of the dollar is increasing, so wherever you go, there is a wedge everywhere. Recall that around fall 2020, the COT reports showed the end of the upward trend, but either the bears simply lacked the strength and desire for a new downward trend, or the money from the Fed outweighed the scales, but the uptrend resumed. The first indicator eloquently shows that the red and green lines are moving away from each other again, which is a sign of an upward trend. In simpler terms, this means that professional players continue to build up longs, and commercial traders (hedgers) - build up shorts. Therefore, at this time, the COT reports again speak in favor of the fact that the euro will continue to grow.
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.
