See also
The EUR/USD currency pair showed a relatively substantial rise on Monday. We believe there was no macroeconomic or fundamental justification for such a sharp depreciation of the U.S. dollar that day. However, as previously noted, the market no longer needs strong reasons to sell off the dollar. The greenback is sold off easily and confidently, unlike the euro, which still can't boast a strong economy or a hawkish ECB policy. Nevertheless, none of these factors matter right now. Any factors—except the trade war—are irrelevant for the dollar. Occasionally, it does appreciate, but the market only wants to buy the U.S. currency when news of trade de-escalation emerges—and such news doesn't arrive every week. Meanwhile, a downgrade of the U.S. credit rating by Moody's could trigger a sell-off.
From a technical standpoint, we now see a resumption of the uptrend. The price had been correcting lower for about a month, but the uptrend, which has been in place for more than three months, remains intact. Naturally, a lot depends on Donald Trump's future actions. Although we cannot predict his next moves, we acknowledge this: the uptrend holds.
Regarding trade signals on Monday, we should highlight the breakout above the 1.1185 level and the drop below 1.1274. In the first case, traders could have entered long positions, which should have been closed at the first sell signal—specifically, the drop below 1.1274. At that point, traders could have entered short positions, which could have been closed near the Senkou Span B line. Therefore, two trades could have been opened—both closed with solid profit.
The most recent Commitment of Traders (COT) report is dated May 13. As the chart above illustrates, the net position of non-commercial traders has long remained bullish. Bears briefly overtook but quickly lost control. Since Trump took office, the dollar has been falling sharply. While we can't guarantee that this decline will continue indefinitely, COT reports reflect the sentiment of major market players, though in current circumstances, that sentiment can shift quickly.
There are no fundamental reasons for the euro to strengthen, but the dollar faces a significant political burden. EUR/USD may continue to correct for several more weeks or months, but the broader 16-year downtrend won't reverse so quickly. Once Trump's trade wars end, the dollar may resume its upward trend.
The red and blue lines on the COT chart have crossed again, signaling a renewed bullish trend. During the last reporting week, the number of long positions from non-commercial traders increased by 15,400, while shorts rose by 6,300. As a result, the net position grew by 9,000 contracts.
In the hourly timeframe, EUR/USD is attempting to resume its uptrend and has secured a position above the Ichimoku indicator lines. The outlook for the U.S. dollar still depends primarily on the progression of the global trade war. The dollar may continue to recover if trade agreements are signed and tariffs are reduced. Otherwise, or in the presence of new negative drivers, the dollar will likely continue to depreciate. Technical analysis and macroeconomic data currently have minimal influence—everything depends on news related to trade negotiations.
Key levels to watch for May 20: 1.0823, 1.0886, 1.0949, 1.1006, 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1321, 1.1426, 1.1534. Ichimoku lines: Senkou Span B (1.1224), Kijun-sen (1.1193). Note: Ichimoku lines may shift during the day and should be accounted for when determining trade signals. Also, don't forget to set a Stop Loss to breakeven once the price moves 15 pips in the correct direction to protect against potential false signals.
On Tuesday, no significant reports or events are scheduled in the U.S. or the Eurozone. As a result, traders will have little to react to during the day. However, Monday again demonstrated that even secondary news can trigger a significant dollar drop. That said, such impactful news doesn't arrive every day, so we're likely to see weak, sideways price movement today.
You have already liked this post today
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Analysis of Thursday's Trades 1H Chart of GBP/USD On Thursday, the GBP/USD pair also traded with minimal volatility. Strangely enough, there was quite a lot of interesting data released yesterday
Analysis of Thursday's Trades 1H Chart of EUR/USD On Thursday, the EUR/USD currency pair traded in a near-flat range with very low volatility (around 50 pips). After the storm
The GBP/USD currency pair remained flat with minimal volatility throughout Thursday. The current decline halted around the 1.3369 level, and the technical picture now suggests that the dollar's rise
The EUR/USD currency pair continued to decline on Thursday after an unexpected surge on Wednesday evening. Recall that on Wednesday evening, it became known that Donald Trump again wants
On Wednesday, the GBP/USD currency pair continued to decline throughout most of the day, until an inexplicable surge in the evening. Recall that on Tuesday, the U.S. inflation report
On Wednesday, the EUR/USD currency pair continued to trade downward, but in the evening it suddenly surged upward. Once again, there were no clear reasons or grounds for the pair's
Analysis of Tuesday's Trades 1H Chart of GBP/USD The GBP/USD pair also plummeted on Tuesday following the release of the U.S. inflation report. In recent weeks, the British pound
Analysis of Tuesday's Trades 1H Chart of EUR/USD The EUR/USD currency pair plunged sharply on Tuesday following the release of the U.S. inflation report. As the saying goes, nothing foretold
On Tuesday, the GBP/USD currency pair continued its downward movement. Although core inflation in the U.S. rose exactly in line with forecasts—and the core rate even accelerated less than expected—the
For most of Tuesday, the EUR/USD currency pair continued to trade with minimal volatility, moving sideways. The Eurozone industrial production report showed a relatively strong reading
InstaTrade
PAMM accounts
Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.
If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.
Why does your IP address show your location as the USA?
Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.
We are sorry for any inconvenience caused by this message.