EUR/USD 5-Minute Analysis
The EUR/USD currency pair continued its strong upward movement on Thursday, which began on Wednesday. A downward pullback started by the end of the day, but it was significantly weaker than the previous rise. The next wave of decline in the U.S. dollar began after the release of U.S. inflation data, which came in below forecasts. However, we do not directly link this report to the new dollar plunge. Inflation came in lower than market expectations but still rose slightly in May. What does this mean? That inflation is increasing. Therefore, the Federal Reserve is even further from resuming its monetary policy easing cycle. This factor is hawkish or bullish for the U.S. dollar.
However, earlier in the week, reports surfaced of mass unrest in America over Donald Trump's immigration policies. News of supposed progress in negotiations with China failed to impress even the most optimistic observers. On Thursday, it became known that Trump plans to "motivate" countries from which he expects trade proposals by raising tariffs, encouraging them to move faster toward trade deals favorable to the U.S. How could the market react to a message about tariff hikes—for everyone at once?
On the 5-minute chart, a fair number of signals formed yesterday. The first sell signal around the 1.1534 level was false, but the price moved down 15 pips, so no loss occurred. The next buy signal from the same level yielded a gain of about 50 pips. The price rebounded from the 1.1607 level, but that signal also turned out to be false, resulting in a slight loss. A breakout above 1.1607 followed, which also turned out to be a false signal. Only the final sell signal provided another small profit. Overall, the profit for the day was modest.
COT Report
The latest COT report is dated June 3. The chart above shows that the net position of non-commercial traders had long been "bullish," and the bears barely managed to gain the upper hand at the end of 2024 but quickly lost it. Since Trump took office, only the dollar has been falling. We cannot confidently say that the dollar's decline will persist, but current global developments indicate this possibility.
We still see no fundamental factors for strengthening the euro, but one very significant factor is the decline of the dollar. The global downward trend persists, but what does the trend even matter now? Once Trump ends his trade wars, the dollar might start growing again — but will he end them, and when?
The red and blue lines have crossed again, meaning the market returns to a "bullish" trend. Over the last reporting week, the number of longs among the "Non-commercial" group decreased by 1,500, while shorts dropped by 4,800. As a result, the net position increased by 3,300.
EUR/USD 1-Hour Analysis
In the hourly timeframe, the EUR/USD pair maintains a local uptrend despite all the trendline breakouts and breaches. As has been the case over the past four months, the market reacts only to events tied to Trump, his decisions, and the trade war. There's no positive news in these areas, but there are plenty of negative developments. As a result, the dollar continues to decline quickly, plunging into the abyss.
For June 13, we identify the following trading levels: 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1607, 1.1666, 1.1704, and 1.1750, as well as the Senkou Span B line (1.1353) and the Kijun-sen line (1.1501). Note that Ichimoku indicator lines may shift throughout the day, so they must be monitored for signal validation. Also, remember to set the Stop Loss to breakeven if the price moves 15 pips in the correct direction. This protects against losses in case of a false signal.
Only secondary releases are scheduled in the Eurozone on Friday, including industrial production and Germany's second estimate of inflation. We believe these data will trigger only a very mild market response—if any at all. In the U.S., the only event will be the University of Michigan Consumer Sentiment Index. The market will likely await clarifications from Trump regarding the tariff increases for all countries that had previously been granted a "grace period" by the U.S. president.
Illustration Explanations:
- Support and resistance price levels – thick red lines where movement may end. They are not trading signal sources.
- Kijun-sen and Senkou Span B lines—These are strong Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour one.
- Extremum levels – thin red lines where the price has previously rebounded. These act as trading signal sources.
- Yellow lines – trend lines, trend channels, and other technical patterns.
- COT Indicator 1 on the charts – the size of the net position for each category of traders.
