The EUR / USD pair was trading quite actively again on April 23. During the day, the uptrend was resumed, and both uptrend lines (on the hourly timeframe) remain relevant. The upward movement has been going on for almost a month, and during this time there were practically no corrections. The upward movement on Friday continued all day and even at night. Thus, in principle, our expectations continue to be justified, since we have already repeatedly said that we are waiting for the continuation of the formation of the global upward trend. Now the pair quotes have reached the level of 1.2100, which we named as the target a week ago. It’s time to adjust. Unfortunately, few signals were generated during Friday, or rather one. During the day, the pair only once worked out the extremum level, and did not even approach the Kijun-sen line. Thus, only by the end of the working day the quotes crossed the level of 1.2081 and formally it was possible to open long positions here, but, of course, it should not have been done almost at the close of trading. As for macroeconomic statistics, there were plenty of them throughout the day. The number “1” marks the publication of business activity indices in the services and manufacturing sectors of the European Union, which turned out to be higher than the forecasted values, however, as we can see, the price was growing just before the publication of these data, and then took a break. The same market reaction was followed by reports on business activity in the services and manufacturing sectors of the United States (figure “2”). Virtually none. The indices were also stronger than forecasted and the dollar rose in price by only 15 points. The number “3” marks the speeches of Janet Yellen and Christine Lagarde, which did not provide any new information to the markets at all.
On the hourly timeframe, the picture is the same. Upward movement. There are rollbacks, but they are small. In general, the pair gained about 400 points with practically no corrections. On the lower timeframes, corrections are even more or less visible, but on the older ones they are practically absent. We have repeatedly listed the reasons in fundamental articles, we recommend that you familiarize yourself. In general, everything continues to flow according to plan. Bears are now practically absent from the market, plus the supply of the American currency is constantly growing. Many factors are currently not in favor of the US dollar. In general, the upward movement may now continue to annual highs around the level of 1.2350. We still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels are 1.2076, 1.2108 and 1.2145, as well as the Kijun-sen line (1.2045). Signals can be “bounces” and “breaking” 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 against possible losses if the signal turns out to be false. There are no important events scheduled for Monday in the European Union that deserve the attention of traders, but in the States a more or less important report on orders for durable goods will be released. Theoretically, it can provoke a reaction of traders, we recommend that you pay attention to it.
We also recommend that you familiarize yourself with the forecast and trading signals for the GBP / USD pair.
Recall that during the last reporting week (April 13-19), the EUR / USD pair increased by 120 points. We would like to remind that since February major players have been intensively cutting their buy contracts and opened sell contracts. In the “Non-commercial” group since the beginning of February, the total number of Buy-positions has decreased from 240 thousand to 190, and the number of Sell-positions has grown from 76 thousand to 127. Thus, the weakening of the “bullish” mood is evident, however, it is still remains bullish, but in the last two weeks it has begun to strengthen again. Recall that the COT reports signal the end of the uptrend since last September, when the lines of the first indicator moved as far apart as possible. However, we still remind traders that the factor of pumping money into the American economy has not been canceled. Simply put, large players can trade as they please, in any direction, buy any currency, but if at the same time the money supply of dollars increases by trillions, but the influence of the players themselves on the foreign exchange market becomes less. Accordingly, now in the first place is simply the factor of increasing money supply in the United States, and not the behavior of non-commercial and commercial traders in the foreign exchange market. During the last reporting week, professional traders opened 6.2 thousand buy contracts and closed 8.5 sell contracts. Thus, their net position increased by 14.7 thousand contracts. Thus, it is possible that the major players realized that the European currency would still rise in price, and the dollar would fall, and decided to trade with the trend themselves. If earlier it was the big players who formed the trend, now they themselves follow the trend. In general, from our point of view, the likelihood of further growth of the European currency in 2021 is very high.
Explanations for illustrations:
Price levels of support and resistance (resistance / support) – levels that are targets when opening purchases or sales. Take Profit levels can be placed near them.
Kijun-sen and Senkou Span B lines – the lines of the Ichimoku indicator, transferred to the 1-hour timeframe from the 4-hour timeframe.
Support and resistance areas are areas from which the price has repeatedly bounced off.
Yellow lines – 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.