EUR/USD 1H
The hourly timeframe on September 16 shows that the euro/dollar pair continued to trade slightly below the Senkou Span B line, which currently lies near the 1.1882 level, as well as slightly under the resistance area of 1.1884-1.1910. The upper line of the side channel is also in this area, in which the pair has been trading for a month and a half.
Therefore, take note that buyers did not find the strength to overcome these resistance at the moment, which means that the pair retains excellent chances for falling towards the support area of 1.1704-1.1724, where the lower line lies of the side channel runs. There are no trend lines or trend channels at this time. Because there is no trend at this time either. From time to time, trends form within the sideways channel, but they usually do not last long.
EUR/USD 15M
Both linear regression channels turned down on the 15-minute timeframe, as the price reached the upper border of the side channel and could not overcome it. The latest Commitment of Traders (COT) report, which, I recall, comes out with a three-day delay and only covers September 2-8, turned out to be absolutely predictable. We expected that the report would not show any fundamental changes in the mood of large traders, since the EUR/USD pair continues to trade in a sideways channel.
The category of non-commercial traders closed 3,073 Buy-contracts (longs) and opened 789 Sell-contracts (shorts) at the end of the reporting week. The changes are minimal considering that the total number of contracts for this category of traders exceeds 300,000. Take note that the net position for players in this category has slightly decreased, which means a weakening of the bullish sentiment, but again minimal. The commercial trader category was much more active and it closed as many as 30,000 contracts during the reporting week.
However, please be reminded that the actions of non-commercial traders are more important, since they are considered to be the ones driving the market, and commercial traders usually open positions opposite to them. The last three trading days of last week were not included in the latest COT report, however, no serious price changes were recorded on those days. There are also no major price changes at the beginning of a new trading week.
The US retail sales report was published on Wednesday, September 16, which turned out to be weaker than expert forecasts. However, traders paid more attention to the Federal Reserve meeting and its results. However, there is nothing special to take note of at this event. The Fed’s key rate remained unchanged. No changes in monetary policy were announced. Thus, the meeting turned out to be a “walk-through”.
A report on inflation in the European Union will be released today, which is starting to really worry, as it dropped below zero. If it remains as weak, then the dollar may rise in price today. A report on applications for US unemployment benefits will also be published, which has recently become less important. The general fundamental background is not in favor of the dollar, so we do not expect the dollar to significantly strengthen.
We have two trading ideas for September 17:
1) Buyers were unable to break through several resistances near the upper line of the side channel of $1.17-1.19. And so, the appearance of a new upward trend is canceled for now. Therefore, we advise you to consider new long positions only if the 1.1884-1.1910 area is overcome, while aiming for the resistance level of 1.2003. Take Profit in this case will be about 60 points.
2) Bears get a new opportunity to pull down the EUR/USD pair to the lower area of the side channel of 1.17-1.19 of almost every day, since the 1.1884-1.1910 area was not overcome once again, but there were several rebounds from the Senkou Span B line . Thus, we recommend trading down at this time while aiming for the support level of 1.1760. Potential Take Profit in this case is about 60 points.
Explanations for illustrations:
Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.
Support and resistance areas are areas from which the price has repeatedly rebounded off.
Yellow lines are trend lines, trend channels and any other technical patterns.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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