The EUR / USD pair on April 29 again reluctantly. The day before yesterday evening, there was a surge in volatility, which led to an increase in the pair by 80 points. After such a strong movement, the quotes began to correct. And it was in the correctional scenario that the entire penultimate trading day of the week passed. As you understand, it was again problematic to make money on a frank correction, and even with low volatility. Three of the last five trading days passed without a definite direction of movement and with minimal volatility (on Wednesday, too, with the exception of a few evening hours, when the results of the Fed meeting were summed up). Thus, few signals were generated on the 5-minute timeframe again, and they were not particularly accurate and profitable. By and large, there was only one signal at all. In the European trading session, the pair dropped to the extremum level of 1.2113 and rebounded from it. Thus, a buy deal should have been opened here. However, the pair went upwards with grief in half 15 points, which was enough to place a Stop Loss order at breakeven, at which the deal was closed already at the American trading session. The price, meanwhile, returned to the level of 1.2113 and for an hour and a half tried to decide what to do around this level. A semblance of a flat has already begun here, which was very difficult to identify. The price crossed this level several times, so after a while it was no longer necessary to react to all these signals. However, traders could still open a deal here, which would definitely be unprofitable in the amount of 10-12 points. The number “1” marks the place of publication of the report on US GDP for the first quarter. This indicator is very important, but, as we can see, traders decided to ignore this report, although GDP grew by 6.4%, which is at least in line with forecasts. Thus, a strengthening of the American currency could be expected here. But it did not happen.
On the hourly timeframe, you can see how the price worked out the extremum level of 1.2145, bounced off it and has been correcting since then. The nearest target is the Kijun-sen critical line. A rebound from it could trigger a resumption of the uptrend, which is still supported by two uptrend lines. Corrections throughout the trend are very small, so a rebound from Kijun-sen is real. Thus, in general for the pair, a not too strong uptrend remains, with frequent but small pullbacks. In general, we still recommend trading from important levels and lines that are indicated on the hourly timeframe. The nearest important levels are 1.2076, 1.2113 and 1.2145, as well as the Kijun-sen line (1.2096). 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. On Friday, the European Union is scheduled to publish GDP for the first quarter in the second estimate, the CPI for April. In the States, there are less significant reports on changes in the level of income and expenditures of the American population, as well as the consumer sentiment index from the University of Michigan. The most important report of the day is inflation in the European Union.
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 rose by 120 points. We would like to remind that since February major players have been intensively cutting 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. You can place Take Profit levels near them.
The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines 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.