EUR/USD 5-Minute Analysis

The EUR/USD currency pair continued its upward movement on Thursday, which had started on Wednesday evening. At this point, it's not possible to say for certain that the flat phase is over, but it clearly cannot last forever, and the fundamental backdrop remains poor for the US dollar. We also noted previously that a classic large-player manipulation occurred on Wednesday. The price moved just a few points below the previous low, simply removing liquidity and triggering traders' Stop Losses. Therefore, growth in the euro was to be expected in any case.

Let's recall that just this week, Donald Trump decided to fire FOMC member Lisa Cook, and also raised tariffs on India as New Delhi refused to stop purchasing Russian energy. Trump maintains that anyone buying anything from Russia is financing the war, so he is ready to impose tariffs and sanctions. The fact that he himself initiated peace talks between Moscow and Kyiv, and is personally participating in them, is seen as irrelevant.

During the past day, the price broke through the 1.1660–1.1666 area and then bounced off it from above three times. Thus, the growth of the euro may not only continue for some time, but may finally begin forming a local uptrend after a week-long flat, which could become part of the global bullish trend that started in January this year. Therefore, as before, we assume the dollar may occasionally show corrective growth, but nothing more.

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 made its first step towards forming a new upward trend, but so far, this is just one step. The global factors that have been driving the US dollar down, which we frequently discuss, remain in place. We still see no grounds for a medium-term dollar rally, and now the trend is upward on almost all timeframes.

For August 29, we highlight the following levels for trading: 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, which should be considered when searching for signals. Don't forget to set your Stop Loss to breakeven if the price moves 15 pips in the right direction. This will protect you from potential losses if the signal turns out to be false.

On Friday, essential reports on unemployment, inflation, and retail sales will be published in Germany. It's unlikely these will cause a strong market reaction, but some response is possible. In the US, the PCE Index, data on personal income and spending, and the University of Michigan Consumer Sentiment Index will be released. These are not the most significant reports, but they could still provoke some market reaction.

Trading Recommendations

On Friday, the upward movement may continue, as the price has overcome the Ichimoku indicator lines. Thus, we expect further growth, targeting the 1.1750–1.1760 area.

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.