EUR/USD 5-Minute Analysis

On Friday, the EUR/USD currency pair continued its decline, which it was "not at fault" for and did not deserve. Recall that the ECB meeting could reasonably be considered "conditionally hawkish," while the Fed meeting was "dovish." On Thursday and Friday, there were no significant macroeconomic releases in the Eurozone or the U.S. that could have triggered the euro's fall. The problem lay with the British pound, which had a mixed reaction to the Bank of England meeting (the only "dovish" decision was to reduce the volume of the QE program), and then collapsed due to new budgetary problems in the UK. The euro simply followed its "brother," as often happens due to the high correlation between the two currencies.

Technically, in the hourly time frame, the situation has not changed at all. The upward trend line remains relevant, and on Friday, the price failed to break through it. Thus, a rebound from this line, as well as from the support level of 1.1750–1.1760, could trigger a new wave of growth in the euro. A consolidation below the trend line would provoke a decline, at least to the Senkou Span B line.

On the 5-minute chart, trading signals on Friday are not worth analyzing. There was no macroeconomic background that day, the euro fell following the pound, and volatility was once again not particularly high. During the European session, the price rebounded twice from the 1.1750–1.1760 level, which could have been a signal to go long, but both signals proved false. The pound dragged the euro down all day, while the euro resisted with all its might.

COT Report

The latest COT report is dated September 16. The illustration above clearly shows that the net position of non-commercial traders had long been "bullish," with the bears only briefly gaining dominance at the end of 2024, which they quickly lost. Since Trump took office as U.S. president for the second time, the dollar has been falling. We cannot say with 100% certainty that the fall of the U.S. currency will continue, but current global developments strongly suggest this scenario.

We still see no fundamental factors supporting the strengthening of the euro, while there are plenty of factors for a decline in the U.S. dollar. The long-term downtrend remains in effect, but at this point, does it really matter where the price was heading over the last 17 years? Once Trump ends his trade wars, the dollar may trend upward again, but recent events have shown that the war will continue in one form or another. A possible loss of Federal Reserve independence is another powerful pressure factor on the U.S. currency.

The positioning of the red and blue lines of the indicator continues to point to a "bullish" trend. Over the last reporting week, the number of long positions in the "Non-commercial" group decreased by 4,800, while the number of short positions increased by 3,100. Thus, the net position fell by 7,900 contracts for the week.

EUR/USD 1-Hour Analysis

On the hourly time frame, the EUR/USD pair maintains an upward trend. Over the past few days, the price has been undergoing a correction, but as long as it stays above the trend line, the upward trend remains valid. There were no significant reasons for the euro to fall, but the British pound played a "bearish trick," and technical corrections are a natural occurrence. On Monday, it will be important to determine whether the trend line, which has provided consistent support for the euro, remains relevant.

For September 22, we highlight the following trading levels: 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 line (1.1694) and the Kijun-sen line (1.1823). The Ichimoku indicator lines may shift throughout the day, which should be taken into account when identifying trading signals. Don't forget to set a Stop Loss at breakeven if the price moves in the intended direction by 15 points. This will help avoid potential losses if the signal turns out to be false.

On Monday, there are no important events or releases scheduled in the Eurozone or the U.S., so volatility may be low. The key focus for Monday is the trend line and how traders behave around it.

Trading Recommendations

On Monday, the pair may resume its move northward, as the uptrend remains intact, and there are still no fundamental factors supporting dollar growth. However, a break below the trend line will open the path for considering short positions with a target at the Senkou Span B line.

Explanation of illustrations:

• Support and resistance price levels – thick red lines where the movement may end. Not sources of trading signals.
• Kijun-sen and Senkou Span B lines – Ichimoku indicator lines transferred to the 1-hour time frame from the 4-hour chart. They are strong lines.
• Extremum levels – thin red lines from which the price has previously bounced. These are sources of trading signals.
• Yellow lines – trend lines, trend channels, and any other technical patterns.