EUR/USD 5-Minute Analysis

On Wednesday, the EUR/USD currency pair continued to trade in the same flat range. The 1.1274 and 1.1426 levels bound the broader sideways channel, while the narrower channel ranges between 1.1274 and 1.1370. Throughout the day, only one report was published in the Eurozone and the US that had the slightest potential to affect the pair's movement — Eurozone retail sales. The report showed a 0.1% monthly decline in March, which was naturally worse than expected. However, as anticipated, traders paid no attention to this release. The pair spent the entire day trading with minimal volatility.

This article will not analyze the Federal Reserve meeting and its outcomes yet. We believe the market needs time to digest the information. After a Fed meeting, the price often moves sharply in one direction only to reverse course within hours. Therefore, it's best to wait for the market to settle before evaluating the meeting's outcome and the market's response.

On the 5-minute chart, no trading signal was generated on Wednesday. The price didn't approach any levels or Ichimoku indicator lines throughout the day. Given the weak movement and proximity of the Fed meeting, the absence of signals is even a positive. In any case, the pair was situated in the middle of the flat channel, and it's generally better to trade at least from the boundaries in such conditions.

COT Report

The latest Commitment of Traders (COT) report is dated April 29. The chart above clearly shows that the net position of non-commercial traders has remained bullish for a long time. Bears barely managed to gain the upper hand but quickly lost it. Since Donald Trump took office, the dollar has been on a steep decline. We cannot definitively say that this decline will continue indefinitely, and the COT reports reflect the sentiment of large players—which, under the current circumstances, can change very quickly.

Still, we continue to see no fundamental reasons for the euro to strengthen, while the dollar does have one significant reason to decline. The pair may continue to correct for a few more weeks or months, but the 16-year downtrend for the U.S. currency is unlikely to end so easily.

The red and blue lines have crossed again, signaling a bullish market trend. Over the last reporting week, long positions among non-commercial traders increased by 200, while short positions dropped by 10,600. As a result, the net position grew by 10,400 thousand contracts.

EUR/USD 1-Hour Analysis

On the hourly timeframe, EUR/USD maintains a general upward trend but has been moving sideways for several weeks amid a lack of updates regarding Trump's trade maneuvering. There's currently very little logic or technical structure in the pair's movement across any timeframe, and the macroeconomic background exerts almost no influence on price behavior. The market waits for updates on the trade war — either escalation or de-escalation — and won't commit to any direction until such clarity arrives.

Trading levels for May 8: 1.0823, 1.0886, 1.0949, 1.1006, 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1321, 1.1426, 1.1534, 1.1607, 1.1666, as well as the Senkou Span B (1.1441) and Kijun-sen (1.1431) lines. Note: Ichimoku indicator lines may shift during the day, which must be considered when identifying signals. Always place a Stop Loss at breakeven if the price moves 15 pips in the right direction. This helps avoid losses in case of false signals.

German industrial production data will be released in the Eurozone, and jobless claims are scheduled in the US. In the current market environment, however, both reports are largely irrelevant. Traders have ignored far more significant data and fundamental developments in recent weeks, so they are unlikely to trigger any meaningful movement.

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.