EUR/USD 5-Minute Analysis
The EUR/USD currency pair continued to trade sideways on Thursday. While previously it had been moving within a range between 1.1274 and 1.1391, on Thursday, it was stuck in an absolute flat near the upper boundary of that range. The euro has been in a sideways movement for a week now, but during the European Central Bank meeting, it was precisely yesterday that the pair showed the lowest volatility and complete unwillingness to move in either direction. In our view, this once again confirms an obvious fact — the market is currently willing to trade only "on Trump." No new tariffs? No news of de-escalation? No movement.
What can we say about the technical picture at this point? On the 1H timeframe, the pair is flat, which could quickly turn into another dollar sell-off as soon as Donald Trump decides to introduce new tariffs. Unfortunately, the fate of the dollar — and many other currencies — lies in the hands of one man. When will Trump introduce new tariffs? Nobody knows. What will those tariffs look like? Also unknown. Predicting the further movement of the currency pair is simply pointless. The best one can do is attempt to trade based on technical signals — but only if they are strong and accurate.
On Thursday, one relatively strong and precise signal was formed — a rebound from the 1.1391 level with minimal deviation. After that, the price decreased to about 35 pips, though it failed to reach the nearest target. On the other hand, it also couldn't break above the 1.1391 level during the day. Therefore, exiting the short position had to be done manually — at any convenient point.
COT Report
The latest COT report is dated April 8. As shown in the chart above, the net position of non-commercial traders remained in bullish territory for a long time. The bears barely managed to take control, but now bulls have regained the initiative. The bears' advantage has diminished since Trump took office, and the dollar has begun to fall.
We can't say with certainty that the dollar will continue to decline, and COT reports reflect the sentiment of large players, which can shift very quickly in the current circumstances.
We still don't see any fundamental factors supporting euro strength, but a major factor is now contributing to dollar weakness. The pair may correct for several more weeks or months, but a 16-year downward trend doesn't reverse overnight.
The red and blue lines have now crossed again, signaling a bullish trend. During the last reporting week, the number of long positions held by the "non-commercial" group increased by 7,000, while short positions dropped by 1,100—resulting in a net increase of 8,100 contracts.
EUR/USD 1-Hour Analysis
The EUR/USD pair quickly resumed its upward movement on the hourly timeframe once Trump started introducing new tariffs. Currently, the price is flat, and we are awaiting new tariffs. We can officially say the downtrend has been canceled on the daily timeframe. That would have never happened had Trump not started the trade war. Thus, the fundamental backdrop has overridden the technical picture — which doesn't happen often, but it does happen. Unfortunately, the current uptrend could end just as abruptly and unexpectedly if Trump stops implementing new tariffs and chooses the path of de-escalation.
For April 18, the following levels are highlighted for trading: 1.0757, 1.0797, 1.0823, 1.0886, 1.0949, 1.1006, 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1323, 1.1391, 1.1482, as well as the Senkou Span B line (1.1126) and the Kijun-sen line (1.1348). Note that the Ichimoku indicator lines may shift throughout the day, which should be considered when identifying trading signals. Also, don't forget to set a breakeven Stop Loss order if the price moves 15 pips in the right direction — this helps prevent potential losses if the signal turns out to be false.
No significant events or reports are scheduled on Friday in the Eurozone or the U.S. However, Thursday clarified that even major events no longer guarantee market movement or reaction. The market is driven solely by news related to the trade war.
Illustration Explanations:
- Support and Resistance Levels (thick red lines): Thick red lines indicate where movement may come to an end. Please note that these lines are not sources of trading signals.
- Kijun-sen and Senkou Span B Lines: Ichimoku indicator lines transferred from the 4-hour timeframe to the hourly timeframe. These are strong lines.
- Extreme Levels (thin red lines): Thin red lines where the price has previously bounced. These serve as sources of trading signals.
- Yellow Lines: Trendlines, trend channels, or any other technical patterns.
- Indicator 1 on COT Charts: Represents the net position size for each category of traders.
