EUR/USD 5M

The EUR/USD pair showed quite good volatility and multidirectional movements on Wednesday. If you don't surprise anyone with volatility now, then everyone expects their own reaction to the US inflation report. We assumed that it might be illogical, and in practice it all happened. You should start with the report itself, which showed an acceleration in the growth of prices overseas by 9.1%. Naturally, such a value significantly increases the likelihood of maintaining the Federal Reserve's aggressive monetary approach, which means it's good for the dollar. What was the reaction? First, the dollar, as it should have, rose to the level of 1.0000, then fell by 100 points, and this morning it had already managed to return to the level of 1.0000. Thus, yesterday's illogical reaction has already been completely won back by the market at the moment. This means that everything is in order, the pair continues to remain near its 20-year lows and can update them again at any time. We expect new attempts to overcome the level of 1.0000.

There were four trading signals on Wednesday and each of them was almost perfect in terms of accuracy. If the first sell signal near the level of 1.0072 could still be missed, since it was at that time that the inflation report was published, then the remaining three should definitely have been worked out. Although even when the first signal was formed, it was possible to trade, since the report came out strong, therefore, one should have expected the dollar to grow. As a result, it was possible to earn about 100 points on the last three signals.

COT report:

The latest 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 they showed a blatant bullish mood of commercial players, but at the same time, the euro was falling at the same time. At this time, the situation has changed, and NOT in favor of the euro. If earlier the mood was bullish, but the euro was falling, now the mood has become 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 7,700, and the number of shorts in the non-commercial group increased by 14,000. Accordingly, the net position decreased again, by almost 7,000 contracts. The mood of the big players remains bearish and has even increased slightly 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 17,000. 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 highest upward movement was about 400 points.

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EUR/USD 1H

The downward trend continues on the hourly timeframe. The pair tried to start an upward correction yesterday, but failed to overcome even the critical line. And at the moment it has already fallen back to 1.0000. Thus, we expect that the euro will continue to fall in the medium term. We highlight the following levels for trading on Thursday - 1.0000, 1.0072, 1.0340-1.0366, 1.0485, as well as Senkou Span B (1.0338) and Kijun-sen (1.0095). 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. There are no important publications or events scheduled in the European Union and the United States on July 14. Thus, traders will have nothing to react to during the day. However, this does not mean at all that the pair will be in a flat all day. The market has clearly shown this week that it is ready to trade even without "macroeconomics" and "fundamentals".

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.