EUR/USD 5-Minute Analysis

The EUR/USD currency pair continued its upward movement on Tuesday, but this time the rally was much stronger. None of Tuesday's published reports played any significant role for traders. European data allowed room for the euro to rise, but, for example, industrial production came in weaker than forecast. US reports didn't interest the market at all: retail sales and industrial production came in above expectations, yet the dollar still fell all day.

As we've said many times, the dollar has plenty of global fundamental reasons to fall, even in the absence of local macroeconomic catalysts. We've repeatedly noted that even technical analysis on practically all timeframes supports only upward movement. So Tuesday's euro rally is not at all surprising for us. Price is simply breaking through level after level, while the dollar continues to have no real chances for sustained growth—only occasional corrections. Today's Fed meeting could only worsen things for the US currency. Even though the decision is basically pre-announced and just needs to be made public, if the market detects even one extra "dovish" nuance in the Fed's statement, the dollar could fall even more swiftly and energetically.

On the 5-minute timeframe, several trading signals were generated yesterday. Overnight, price bounced from the 1.1750–1.1760 area, and at the European session open, price was still close enough to this signal point, so a long position could be opened. During the US session, the 1.1846–1.1857 area was reached and almost immediately broken. This allowed the upward movement to continue.

COT Report

The latest COT report (as of September 9) shows the net position of non-commercial traders has been "bullish" for a long time, with bears only barely taking the upper hand at the end of 2024, and quickly losing it. Since Trump took office as US President, the dollar has been the only currency to fall. We can't say with 100% certainty that the dollar will keep declining, but current events globally do point in that direction.

We still see no fundamental reasons for euro strength, but plenty are supporting the dollar's drop. The global long-term downtrend remains, but what does the last 17 years' price action matter now? Once Trump ends his trade wars, the dollar may rally, but recent events show that won't happen anytime soon. Potential loss of Fed independence is another major pressure point for the US currency.

The red and blue lines of the indicator keep pointing to a persistent "bullish" trend. In the last reporting week, the number of longs in the Non-commercial group rose by 2,400 contracts, while shorts fell by 3,700. Thus, the net position increased by 6,100 contracts, which isn't a significant change.

EUR/USD 1-Hour Analysis

On the hourly chart, EUR/USD continues to show an uptrend. Yesterday, movement north strengthened further, and on the daily timeframe, it's clear that 2025's uptrend has officially resumed. Accordingly, traders are justified in expecting a further rise in the euro by as much as 500–600 pips. There is no limit to the dollar's decline given Donald Trump's current policy stance.

For September 17, we highlight the following levels for trading: 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1604–1.1615, 1.1666, 1.1750–1.1760, 1.1846–1.1857, 1.1922, 1.1971–1.1988, as well as the Senkou Span B (1.1694) and Kijun-sen (1.1766) lines. The Ichimoku indicator lines can move during the day and should be kept in mind when analyzing trade signals. Remember to move your Stop Loss to breakeven if the price moves 15 pips in your favor; this protects against losses should a signal prove false.

On Wednesday, the eurozone will publish a second estimate of August inflation and a second speech by Christine Lagarde this week. Neither event is likely to excite the market. In the US, several minor reports will be out during the day, with the key event in the evening: the Fed meeting.

Trading Recommendations

On Wednesday, the pair may continue its upward movement. Thus, long positions remain current with targets at 1.1894, 1.1922, and 1.1971–1.1988. We see no grounds for short positions at this time. Be ready for sharp reversals and high volatility in the evening.

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.
• Indicator 1 on the COT charts – the size of the net position for each category of traders.