EUR/USD 5-Minute Analysis
The EUR/USD currency pair exhibited a particularly interesting trend on Thursday. As a reminder, the FOMC meeting results were announced Wednesday evening, and we once again considered them hawkish. It's important to remember that the market constantly expects the Federal Reserve to cut rates and forecasts several reductions by year-end. However, in reality, the Fed continues to maintain its current monetary policy. Since there is a major discrepancy between market expectations and reality, we classify the meeting's outcome as hawkish.
However, the dollar's strengthening on Wednesday evening and Thursday morning was laughable. Once again, we had to note that the market is not taking the U.S. dollar seriously and is ignoring macroeconomic and fundamental factors, with practically no logic behind the moves.
However, during the U.S. trading session, the dollar unexpectedly increased in value. What was the cause? Especially considering that the dollar failed to gain against the British pound, even though the pound had twice as many reasons to fall, given that the Bank of England cut its key interest rate! As we've said before, market movements have no logic — it's complete randomness. Let this remind traders that predicting market movements is extremely difficult, and when the market doesn't respond to news or constantly interprets it differently, trading should rely solely on technical analysis. The flat phase can now be considered over.
Technically, Thursday provided some excellent signals. The price formed four solid technical setups: a break through 1.1321, a bounce from 1.1274, another bounce from 1.1321, and a second break through 1.1274. Based on these, three trades could have been opened, and all three were profitable. So, finally, we got a win after three weeks of pure range-bound movement — but everything comes to an end eventually.
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 time frame, the EUR/USD pair has exited its sideways channel, but that doesn't necessarily mean the downward movement will continue. Logic and technical consistency remain minimal across all time frames. It seems the market has grown tired of waiting for new tariffs from Trump and decided to start taking profits on long positions. The Fed's stance on monetary policy may also have contributed. However, we cannot say that the "dollar nightmare" is over.
Trading levels for May 9: 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. Ichimoku lines: Senkou Span B (1.1441), Kijun-sen (1.1431). The Ichimoku indicator lines may shift throughout the day and should be considered when identifying trade signals. Don't forget to move your Stop Loss to breakeven once the price moves 15 pips in the right direction. This helps protect against potential losses if the signal turns out to be false.
No important events are scheduled in either the Eurozone or the U.S., so we don't expect strong intraday movements. Trading is only possible based on technical setups, but the pair doesn't always offer clean technical movements. So be cautious when entering positions.
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.
