Forecast and trading signals for EUR/USD on May 1. COT report. EUR stuck in narrow range
May 1, 2023 1:22 pm
Analysis of EUR/USD 5M.
The EUR/USD pair got stuck in a narrow range last Friday. At first, the pair dropped by 50-60 pips but later it recouped its losses. Interestingly, in the morning, the eurozone and Germany published several crucial reports. However, they were bearish for the euro. So, it tumbled. However, in the afternoon, speculators ignored fresh US economic reports. It triggered a fall in the greenback. This movement was quite unexpected. However, sometimes, the US dollar declines for no reason. Although the pair has stopped its growth in the medium term, it is still too high taking into account the fundamental background.
There are a few trading signals last Friday at 1.0993-1.1033. However, speculators were unwilling to open positions in this range. The price broke out of this channel only twice. At first, it consolidated below it but it was unwise to open short positions. The potential losses were much bigger than the potential profit. Short positions should have been closed above 1.1033. The same applied to a buy signal. It was better to refrain from opening long positions as well. Today, the price is flat as trading volumes are low due to a day off in many countries.
COT report:
On Friday, a new COT report for April 25 was released. In the last 8-9 months, the COT reports have perfectly reflected what has been happening in the market. The charts above clearly show that the net position of large traders (the second indicator) began to increase in September 2022. At about the same time, the euro resumed a bullish bias. Currently, the net position of non-commercial traders is bullish and remains very high. It boosts further growth of the euro. The high level of the net position signals the competition of the uptrend. The first indicator also points to such a scenario. The red and green lines are very far from each other, which often happens before the end of the trend. The euro tried to resume a downward movement. However, so far, we have seen only a pullback. During the last reporting week, the number of long positions of the non-commercial group of traders increased by 1,100 and the number of short ones dropped by 3,900. The net position advanced by 5,000 contracts. The number of long positions is bigger than the number of short ones. Non-commercial traders already have opened 169,000 long positions. The gap is almost threefold. Investors are still unable to start a correction. Even without COT reports, it is clear that the pair is likely to resume a new fall. Yet, currently, bullish momentum is strong.
Analysis of EUR/USD 1H.
On the 1H chart, the pair maintains an upward trend as it is trading above the trend line and above all the lines of the Ichimoku indicator. However, we do not see any upward movement now, a strong correction, or a flat. Its movements are chaotic. This week they may become even more random due to a large number of different news and events. On Monday, traders should pay attention to the following levels: 1.0762, 1.0806, 1.0868, 1.0926, 1.1068, 1.1137-1.1185, 1.1234, 1.1274, as well as the Senkou Span B (1.0993) and Kijun-sen (1.1029) lines. The lines of the Ichimoku indicator could move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels but they provide no signals, for instance, bounces or breakouts of extreme levels. Do not forget about placing a Stop Loss order if the price has gone in the right direction by 15 pips. It will help you avoid possible losses if the signal turns out to be false. On May 1, the US ISM Manufacturing Index is on tap. There will be no other important data today. In the American session, the pair may be more volatile. However, it is likely to remain in the same range.
Description of chart:
Support and resistance levels are thick red lines where the trend may end. They do not provide trading signals.
The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, plotted to the 1H chart from the 4H one. They provide trading signals.
Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals.
Yellow lines are trend lines, trend channels, and any other technical patterns.
Indicator 1 on the charts is the net position size of each category of traders.
Indicator 2 on the charts is the net position size for the non-commercial group of traders.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of EUR/USD 5M.
The EUR/USD pair got stuck in a narrow range last Friday. At first, the pair dropped by 50-60 pips but later it recouped its losses. Interestingly, in the morning, the eurozone and Germany published several crucial reports. However, they were bearish for the euro. So, it tumbled. However, in the afternoon, speculators ignored fresh US economic reports. It triggered a fall in the greenback. This movement was quite unexpected. However, sometimes, the US dollar declines for no reason. Although the pair has stopped its growth in the medium term, it is still too high taking into account the fundamental background.
There are a few trading signals last Friday at 1.0993-1.1033. However, speculators were unwilling to open positions in this range. The price broke out of this channel only twice. At first, it consolidated below it but it was unwise to open short positions. The potential losses were much bigger than the potential profit. Short positions should have been closed above 1.1033. The same applied to a buy signal. It was better to refrain from opening long positions as well. Today, the price is flat as trading volumes are low due to a day off in many countries.
COT report:
On Friday, a new COT report for April 25 was released. In the last 8-9 months, the COT reports have perfectly reflected what has been happening in the market. The charts above clearly show that the net position of large traders (the second indicator) began to increase in September 2022. At about the same time, the euro resumed a bullish bias. Currently, the net position of non-commercial traders is bullish and remains very high. It boosts further growth of the euro. The high level of the net position signals the competition of the uptrend. The first indicator also points to such a scenario. The red and green lines are very far from each other, which often happens before the end of the trend. The euro tried to resume a downward movement. However, so far, we have seen only a pullback. During the last reporting week, the number of long positions of the non-commercial group of traders increased by 1,100 and the number of short ones dropped by 3,900. The net position advanced by 5,000 contracts. The number of long positions is bigger than the number of short ones. Non-commercial traders already have opened 169,000 long positions. The gap is almost threefold. Investors are still unable to start a correction. Even without COT reports, it is clear that the pair is likely to resume a new fall. Yet, currently, bullish momentum is strong.
Analysis of EUR/USD 1H.
On the 1H chart, the pair maintains an upward trend as it is trading above the trend line and above all the lines of the Ichimoku indicator. However, we do not see any upward movement now, a strong correction, or a flat. Its movements are chaotic. This week they may become even more random due to a large number of different news and events. On Monday, traders should pay attention to the following levels: 1.0762, 1.0806, 1.0868, 1.0926, 1.1068, 1.1137-1.1185, 1.1234, 1.1274, as well as the Senkou Span B (1.0993) and Kijun-sen (1.1029) lines. The lines of the Ichimoku indicator could move during the day, which should be taken into account when determining trading signals. There are also support and resistance levels but they provide no signals, for instance, bounces or breakouts of extreme levels. Do not forget about placing a Stop Loss order if the price has gone in the right direction by 15 pips. It will help you avoid possible losses if the signal turns out to be false. On May 1, the US ISM Manufacturing Index is on tap. There will be no other important data today. In the American session, the pair may be more volatile. However, it is likely to remain in the same range.
Description of chart:
Support and resistance levels are thick red lines where the trend may end. They do not provide trading signals.
The Kijun-sen and Senkou Span B lines are the lines of the Ichimoku indicator, plotted to the 1H chart from the 4H one. They provide trading signals.
Extreme levels are thin red lines from which the price bounced earlier. They provide trading signals.
Yellow lines are trend lines, trend channels, and any other technical patterns.
Indicator 1 on the charts is the net position size of each category of traders.
Indicator 2 on the charts is the net position size for the non-commercial group of traders.
The material has been provided by InstaForex Company – www.instaforex.com
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