EUR/USD 5-Minute Analysis

The EUR/USD currency pair showed ultra-low volatility on Friday. The day's macroeconomic backdrop was quite weak, and traders had already had plenty of diverse information over the week to keep the uptrend intact. The uptrend did persist, but traders were clearly in no hurry to buy more. There may be several reasons. First, traders may be waiting for the Fed meeting—though in our view, everything is already quite clear about that event. Second, the market may be uncertain about the continuation of the trade war, since the Supreme Court could block Trump's tariffs. Third, the market is watching for new Trump moves regarding FOMC members, since the US president lost the lawsuit over Lisa Cook, but has already filed another appeal.

All these factors may be holding back the dollar's decline. Once these factors that are propping up the dollar disappear, the growth of EUR/USD should resume. On Friday, Germany released an unimportant (second estimate) inflation report for August, and in the US, the University of Michigan Consumer Sentiment Index printed a weak result, but the market had no intention of trading actively that day.

The 5-minute chart clearly shows the pair ranging in a flat market with low volatility all day. The only signal worth noting was a bounce from 1.1750. The Kijun-sen line was ignored due to the flat.

COT Report

The latest COT report (as of September 9) shows the net position of non-commercial traders has been "bullish" for a long time, with bears only barely taking the upper hand at the end of 2024, and quickly losing it. Since Trump took office as US President, the dollar has been the only currency to fall. We can't say with 100% certainty that the dollar will keep declining, but current events globally do point in that direction.

We still see no fundamental reasons for euro strength, but plenty are supporting the dollar's drop. The global long-term downtrend remains, but what does the last 17 years' price action matter now? Once Trump ends his trade wars, the dollar may rally, but recent events show that won't happen anytime soon. Potential loss of Fed independence is another major pressure point for the US currency.

The red and blue lines of the indicator keep pointing to a persistent "bullish" trend. In the last reporting week, the number of longs in the Non-commercial group rose by 2,400 contracts, while shorts fell by 3,700. Thus, the net position increased by 6,100 contracts, which isn't a significant change.

EUR/USD 1-Hour Analysis

On the hourly timeframe, EUR/USD continues a not-very-strong uptrend. A bounce from the trendline alongside the US inflation report has sparked another move higher. The pair still spends most of its time in the 1.1615–1.1750 range, but there is an upward bias. There remain plenty of bearish factors for the dollar, but market activity has been low this past month.

September 15 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, plus the Senkou Span B (1.1660) and Kijun-sen (1.1721) lines. The Ichimoku lines may shift during the trading day, so keep that in mind when using signals. Remember to set your Stop Loss to breakeven if price moves 15 pips in your favor—this will guard against possible losses if the signal is false.

Monday in the Eurozone features the first of three Lagarde speeches this week. No significant remarks are expected from the ECB chief that could impact the euro, since last week's meeting already provided all the needed information to the market.

Trading Recommendations

On Monday, the pair could continue moving north, but must first overcome the key 1.1750–1.1760 area. If that happens, long positions become relevant, aiming for 1.1846–1.1857. A bounce from 1.1750–1.1760 could trigger a new correction.

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.