EUR/USD 5-Minute Analysis
On Wednesday, the EUR/USD currency pair moved exactly as expected — in several aspects. First, let's start with the "triangle" pattern we discussed yesterday. We warned that such formations often precede a new upward movement. However, before this rise begins, the price might falsely break through the lower boundary and mislead traders. That's precisely what happened. We should also mention that Trump raised tariffs on China to an unbelievable 104%, and in response, China imposed 84% tariffs on Wednesday. Thus, the trade war between the U.S. and China continues to escalate — a development that can only negatively affect the U.S. dollar.
But the "icing on the cake" was the news of a proposed 500% tariff on China, suggested by a Trump administration member on Wednesday. It's not just the U.S. President who's hostile toward the world — his entire team appears to share the sentiment. Well then, if it's 500%, so be it. If Trump implements such absurdly high tariffs, we have little doubt that China will retaliate. Beijing has repeatedly shown that it is ready to meet force with force.
Regarding Wednesday's trading signals, there were three precise bounces from key levels — two from 1.1092 and one from 1.1006. In all three cases, the nearby targets (those same levels) were reached or nearly reached. These three signals could have generated about 120–150 pips in profit. Market chaos and panic persist, so prices may fly in either direction at any moment.
COT Report
The latest COT report is dated April 1. As shown in the chart, the net position of non-commercial traders remained bullish for a long time. The bears barely managed to gain control briefly, but now the bulls are back in charge. The bears' advantage has faded fast since Trump took office, and the dollar has since plunged. We cannot say definitively that the dollar's decline will continue, and the COT reports reflect sentiment among major players, which can shift quickly in today's environment.
We still see no fundamental factors supporting euro strength—but one decisive factor for dollar weakness has emerged. The correction may last for weeks or even months, but a 16-year downward trend isn't going to end so quickly.
The red and blue lines have crossed again, indicating a bullish market trend. During the latest reporting week, the number of long positions in the "non-commercial" group fell by 6,500, while short positions increased by 7,100. As a result, the net position declined by 13,600 contracts.
EUR/USD 1-Hour Analysis
In the hourly time frame, EUR/USD quickly resumed its upward movement once Trump began implementing new tariffs. We believe the decline will eventually resume in the medium term due to the divergence in ECB and Fed monetary policies. However, it's unclear how long the market will continue pricing in just the "Trump factor" — and where the pair will ultimately end up. Or how long will Trump himself keep stirring up global tensions? Right now, the markets are dominated by panic and chaos, so if we had previously avoided forecasting price movements even a week ahead, it's even more difficult now. Our only advice is to wait until the "crisis" eases or stick to intraday trading only.
On April 10, we highlight the following levels for trading - 1.0461, 1.0524, 1.0585, 1.0658-1.0669, 1.0757, 1.0797, 1.0823, 1.0886, 1.0949, 1.1006, 1.1092, 1.1147, 1.1185, 1.1234, as well as the Senkou Span B (1.0940) and Kijun-sen (1.1014) lines. Ichimoku indicator lines may shift during the day, which should be considered when determining trading signals. Don't forget to set your Stop Loss to breakeven once the price moves 15 pips in the right direction. This protects you in case the signal turns out to be false.
As for Thursday's fundamentals, the U.S. Consumer Price Index is worth noting — but we doubt many care about that right now. Inflation may drop to 2.6%, but what does that matter if it can spike back to 5% in 2025 due to Trump's tariffs? We doubt that the Fed's stance will change because inflation drops slightly.
Illustration Explanations:
- Support and Resistance Levels (thick red lines): Thick red lines indicate where movement may come to an end. Please note that these lines are not sources of trading signals.
- Kijun-sen and Senkou Span B Lines: Ichimoku indicator lines transferred from the 4-hour timeframe to the hourly timeframe. These are strong lines.
- Extreme Levels (thin red lines): Thin red lines where the price has previously bounced. These serve as sources of trading signals.
- Yellow Lines: Trendlines, trend channels, or any other technical patterns.
- Indicator 1 on COT Charts: Represents the net position size for each category of traders.
