EUR/USD 5-Minute Analysis

On Tuesday, the EUR/USD currency pair remained flat for the first half of the day and then moved higher in the second half. During the U.S. session, Jerome Powell delivered a speech, which the markets (presumably) interpreted as another reason to sell the U.S. dollar. As a reminder, Donald Trump continues to attack Powell and is practically forcing him to resign. A justification has already been presented—Powell has been portrayed to the public as a financial manipulator and spendthrift due to rising renovation costs for Federal Reserve buildings, which increased from the originally approved $1.9 billion to $2.5 billion. Oddly, complaints against Powell emerged only now, considering that the budget was approved by the U.S. Congress back in 2021. However, we all understand the true motive behind these accusations.

For the dollar, the conflict between the U.S. president and the Fed chair—which could end not only with Powell's resignation but also with the loss of independence for the U.S. central bank—is yet another bearish factor for the global economy. This comes on top of the global trade war initiated by Trump. For the past three weeks, we observed a purely technical correction. However, on Monday, the pair broke above the descending channel, and on Tuesday, it moved above the Senkou Span B line, indicating further growth is expected.

As for Tuesday's trading signals, the only notable ones were imprecise breakouts and bounces off the Senkou Span B line. At the moment the signals formed, this line was shifting on the chart, as is visible on the 4-hour timeframe. Therefore, no accurate signals were generated. Nevertheless, the line has now been breached, which means the Ichimoku indicator signals an upward trend.

COT Report

The latest COT report is dated July 15. As shown in the chart above, the net position of non-commercial traders had been bullish for a long time. Bears only barely gained the upper hand at the end of 2024—and then quickly lost it. Since Trump took office, the dollar has been the only currency to fall. While we can't say with 100% certainty that the U.S. currency will continue to decline, current global developments suggest that scenario.

We still do not see any fundamental reasons for the strengthening of the euro; however, one very strong factor remains for the dollar's continued decline. The global downtrend persists—but does it matter now where the price has moved over the past 16 years? Once Trump ends his trade wars, the dollar may resume growth—but will Trump ever end them? And when?

The position of the red and blue indicator lines still points to a bullish trend. During the latest reporting week, the number of long positions in the "Non-commercial" group increased by 1,000 contracts, while short positions decreased by 6,600. As a result, the net position increased by 7,600 contracts.

EUR/USD 1-Hour Analysis

On the hourly timeframe, the EUR/USD pair has completed its downtrend. Trump continues to raise and impose new tariffs, and hopes of signing trade deals with anyone on Trump's "blacklist" diminish day by day. Without trade deals, the trade war only escalates further, which naturally bodes ill for the dollar. Trump's war against Powell is another factor weighing on the dollar in 2025.

For July 23, we highlight the following trading levels: 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1615, 1.1666, 1.1750, 1.1846–1.1857, as well as the Senkou Span B line (1.1676) and the Kijun-sen line (1.1659). The Ichimoku indicator lines may shift throughout the day, which should be taken into account when identifying signals. Don't forget to set Stop Loss to breakeven once the price moves 15 pips in the correct direction. This helps protect against potential losses if the signal turns out to be false.

No major events or reports are scheduled in the EU or the U.S. for Wednesday. As such, volatility may be low during the day. However, the ongoing themes of the trade war and Powell's possible resignation could again trigger significant movements—especially during the U.S. trading session. The dollar does not even need a macroeconomic backdrop to continue its decline.

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.