EUR/USD Analysis on 5M

The EUR/USD currency pair continued its upward movement on Tuesday, as anticipated. Despite the absence of significant events yesterday and the expectation that news of the upcoming end of the shutdown would strengthen the dollar, the market continued to buy the euro. Is this illogical? Just as it was illogical to observe the dollar's rise in October during a continuing shutdown and alongside new tariffs from Trump. The EUR/USD pair remains flat on the daily timeframe, which explains everything. During the latest downturn, the price approached the lower boundary of the range at 1.1400–1.1830, and it has been rising for four days now. Therefore, one can assume that the illogical decline of the pair has concluded, and a logical rise awaits.

Because the overall fundamental backdrop is entirely in favor of the euro. The dollar has no "trump card" while Donald Trump remains president. Recall that Trump, even during his first presidential term, did not hide his desire to see a cheaper dollar. How can one expect the dollar to rise when even the president wants to weaken it?

On the 5-minute timeframe, a decent buy signal was formed yesterday near the Senkou Span B line. After breaching this important line, the price continued its upward movement, reaching the nearest target area of 1.1604-1.1615, where profits could be taken.

COT Report

The latest COT report is dated September 23. Since then, no further COT reports have been published due to the U.S. "shutdown." In the illustration above, it is clear that the net position of non-commercial traders has long been "bullish," with bears struggling to gain the upper hand at the end of 2024 but quickly losing it. Since Trump took office for a second term as President of the U.S., the dollar has been falling. We cannot assert that the decline of the American currency will continue with 100% probability, but current world events suggest that this may be the case.

We still do not see any fundamental factors that would strengthen the euro, while there remain sufficient factors that would weaken the dollar. The global downtrend is still ongoing, but what difference does it make where the price moved in the last 17 years? Once Trump concludes his trade wars, the dollar may start to rise, but recent events indicate that the war will continue in one form or another for a long time yet.

The position of the red and blue lines of the indicator continues to indicate the preservation of a "bullish" trend. During the last reporting week, the number of long positions in the "Non-commercial" group decreased by 800, while the number of shorts increased by 2,600. Consequently, the net position decreased by 3,400 contracts over the week. However, this data is already outdated and holds no significance.

EUR/USD Analysis on 1H

On the hourly timeframe, the EUR/USD pair is finally showing signs of initiating an upward trend. The Senkou Span B line has been breached, so the trend is likely to have changed to upward. We believe that the main reason for the inadequate and illogical movements recently is the flat condition on the daily timeframe. This flat condition is still ongoing. As the price approached the lower boundary of the trading channel, we can expect a local upward trend on the hourly timeframe.

For November 12, we identify the following trading levels: 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1604-1.1615, 1.1657-1.1666, 1.1750-1.1760, 1.1846-1.1857, 1.1922, 1.1971-1.1988, as well as the Senkou Span B line (1.1571) and Kijun-sen (1.1531). The Ichimoku indicator lines may shift throughout the day, which should be taken into account when determining trading signals. Don't forget to set a Stop Loss order to break even if the price moves 15 pips in the right direction. This will protect against potential losses if the signal turns out to be false.

On Wednesday, the second estimate of German inflation for October is scheduled for release in the Eurozone. Second estimates rarely deviate from the first, so we do not expect a strong market reaction. This report will likely not affect market sentiment at all. No interesting events are scheduled in the U.S. for Wednesday.

Trading Recommendations:

On Wednesday, traders may anticipate continued growth, as the Senkou Span B line has been breached. A bounce from the area of 1.1604-1.1615 allowed for short positions to be opened, but we would not rush into those, as the trend is currently changing. Breaching the area of 1.1604-1.1615 will allow for new long positions with a target of 1.1657.

Explanations for Illustrations:

• Support and resistance price levels are shown as thick red lines, near which the movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines are lines from the Ichimoku indicator transferred to the hourly timeframe from the 4-hour timeframe. They are strong lines.
• Extreme levels are thin red lines from which the price previously bounced. They are sources of trading signals.
• Yellow lines are trend lines, trend channels, and any other technical patterns.
• Indicator 1 on COT charts represents the size of each category of traders' net position.