EUR/USD 5-Minute Analysis

On Wednesday, the EUR/USD currency pair made moves that did not align with the technical, fundamental, or macroeconomic picture at all. To begin with, there were no macroeconomic reports during the day. In the morning, news came from Washington: Donald Trump raised tariffs for India to 50% as punishment for New Delhi's disobedience. Recall that Trump demanded India stop buying Russian oil, to which New Delhi responded with a categorical refusal. Frankly, we understand New Delhi's position. Essentially, the market faced a new escalation in the trade war, so it would have been logical for the dollar to fall immediately. However, in the first half of the day, it confidently strengthened, which we believe was pure market manipulation. In the second half of the day, the long-awaited decline of the US currency began, and we think it is likely to continue.

From a technical standpoint, last week's moves have been very hard to explain. Last Friday, the downtrend was canceled, but the price subsequently fell. Yesterday, the pair broke the previous local minimum and then started to rise. We still expect a new local uptrend to form.

With this kind of movement, it was better not to trade the 5-minute timeframe signals. Even so, the first sell signal near the 1.1604–1.1615 area was not a loss; the price fell more than 15 pips, allowing traders to bring the Stop Loss to breakeven. The next bounce signal from this area turned out to be false and unprofitable. The last buy signal should not have been acted upon, as the first two were false; ironically, this signal may ultimately lead to a new uptrend.

COT Report

The latest COT report is dated August 19. The chart above clearly shows that the net position of non-commercial traders had long been bullish, while bears only briefly gained dominance at the end of 2024 before quickly losing it again. Since Donald Trump assumed the U.S. presidency, the dollar has been the only currency in decline. We cannot say with 100% certainty that this will continue, but current global developments strongly point in that direction.

We still see no fundamental factors supporting the euro's rise, but there remain plenty of factors weighing on the dollar. The global downtrend in the U.S. currency continues, and what does it matter now where the price moved in the past 17 years? Once Trump ends his trade wars, the dollar may rise again, but recent events show the wars will persist in one form or another.

The positions of the red and blue lines on the indicator continue to signal a bullish trend. During the last reporting week, long positions among the "Non-commercial" group increased by 6,400, while shorts rose by 3,100. As a result, the net position rose by 3,400, a minor change.

EUR/USD 1-Hour Analysis

On the hourly timeframe, EUR/USD has taken its first step toward forming a new uptrend, but for now, that's all it is—a first step. The global factors driving the dollar's decline remain intact. We still see no grounds for a medium-term rise for the dollar, and technically, the trend is upward on almost all timeframes now. The dollar can't move in one direction every day, so pauses are normal.

For August 28, we highlight the following trading levels: 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1604–1.1615, 1.1666, 1.1750–1.1760, 1.1846–1.1857, as well as the Senkou Span B (1.1660) and Kijun-sen (1.1663) lines. The Ichimoku indicator lines may fluctuate throughout the day, so this should be taken into account when interpreting your trading signals. Remember to set Stop Loss to breakeven if the price goes 15 pips in your favor—this protects against losses if a signal turns out to be false.

On Thursday, the US will release the second estimate of Q2 GDP, which will be the only significant news for the day. Remember, the second estimate is of little consequence to the market. The Eurozone economic calendar is empty.

Trading Recommendations

On Thursday, upward movement may resume. First, we expect growth in the Ichimoku indicator lines, followed by a breakout above those lines and further growth, with the target at 1.1750–1.1760.

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.