EUR/USD 5-Minute Analysis

On Thursday, the EUR/USD currency pair underwent a slight downward correction within the framework of a new uptrend on the hourly time frame. Throughout the current week, Donald Trump has been imposing new tariffs and increasing existing ones, leading to a renewed escalation of the trade war. For the past six months, the vast majority of analysts have been focused almost exclusively on tariff developments—because, frankly, there is little else worth writing about. Yes, macroeconomic data continues to come in, and central banks continue to meet, but the market has concentrated about 80% of its attention on the trade war.

Given the ongoing lack of de-escalation in the trade conflict, we see no reason for the U.S. dollar to strengthen. Over the past month or so, the dollar has undergone a fairly active correction, but every story has its end. Given the highly likely resumption of the Federal Reserve's monetary easing in September, the dollar only gains more reasons to weaken. On Thursday, Germany released its industrial production report for June, which showed a decline of 1.9% versus the forecast of -0.5%. However, as expected, the market showed no reaction to this report.

In the 5-minute time frame, three trading signals were formed yesterday. First, the pair broke above the 1.1666 level, and then fell back below it. In the first case, the price failed to sustain upward momentum but still moved 20 pips in the correct direction. The second signal triggered a decline to the 1.1615 level, from which a perfect rebound occurred, forming a buy signal. This buy signal was also tradable. By the end of the day, the price rose by another 15–20 pips, which traders could add to their results.

COT Report

The latest COT report is dated July 29. In the illustration above, it is visible that the net position of non-commercial traders had long been "bullish"; the bears barely took the upper hand at the end of 2024 but quickly lost it again. Since Trump assumed the presidency, the dollar has been the only currency to fall. We cannot say with 100% certainty that the U.S. dollar will continue to decline, but current global developments suggest that scenario.

We still do not see any fundamental factors supporting the euro's strength. However, there remains one very significant factor pushing the U.S. dollar down. The global downtrend persists — but what does it matter where the price has been moving over the past 16 years? Once Trump ends his trade wars, the dollar might start rising, but the latest trade deals have shown that the conflict will continue in one form or another.

The red and blue lines of the indicator continue to show a bullish trend. During the last reporting week, long positions among the "non-commercial" group increased by 400, while short positions rose by 2,600. Consequently, the net position decreased by 2,200 contracts, which represents a minor change.

EUR/USD 1-Hour Analysis

On the hourly time frame, the EUR/USD pair continues to form a new uptrend. On the hourly chart, the price has broken above the Senkou Span B line, while on the daily chart, it bounced from the same line. Therefore, considering both technical and fundamental factors, there are more reasons now to expect upward movement than a renewed fall in the euro. Trump continues to take actions that escalate the trade war.

For August 8, we identify the following trading levels: 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1615, 1.1666, 1.1750–1.1760, 1.1846–1.1857, as well as the Senkou Span B line (1.1590) and the Kijun-sen line (1.1545). The Ichimoku indicator lines may shift throughout the day and should be considered when identifying trade signals. Don't forget to set a Stop Loss to break even if the price moves 15 pips in the correct direction. This protects against potential losses in case of a false signal.

There are no significant events or reports scheduled for Friday, either in the Eurozone or the U.S. It will be a completely quiet Friday—unless Trump disrupts the calm.

Trading Recommendations

On Friday, price growth may continue, at least based on the rebound from the Senkou Span B line (daily time frame) and the bounce from the 1.1615 level on the hourly chart. Therefore, we remain in long positions with targets at 1.1666 and 1.1750–1.1760. Selling is not being considered for now.

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.
• COT Indicator 1 on the charts – the size of the net position for each category of traders.