Trading Recommendations and Analysis for EUR/USD on March 6. The Euro Even Dropped on a "Holiday"

The EUR/USD currency pair traded lower again on Thursday, even though a rise in the European currency would have been more logical. Firstly, the price collapsed by 290 pips over two days, suggesting a correction. Secondly, no fundamentally new reports emerged from the Middle East, so there was no reason for the dollar to rise. It is possible that the Eurozone retail sales report negatively affected the euro, as it was predictably below forecasts. However, this report is not significant enough to justify selling the euro throughout the day. Recently, geopolitics have taken center stage, and traders have repeatedly ignored even more important reports.

From a technical standpoint, the downward trend is indisputable, but there are currently no trend lines or channels to define its potential conclusion. Traders will have to rely solely on the Ichimoku indicator lines. The EUR/USD pair is in a challenging position, where the price could "shoot" in either direction. For instance, if news from Iran indicates further escalation of the conflict or involvement of new "third parties," the dollar may once again serve as a safe haven for the entire world. If today's labor market and unemployment reports from the US are slightly more positive than forecasts, traders may rush to buy the dollar again. Conversely, if none of the aforementioned situations occur, the euro should begin to recover.

On the 5-minute timeframe, the movements observed yesterday were far from favorable. Three trading signals were generated in the 1.1615-1.1625 range, and the first two proved false. The third signal, which allowed traders to earn a bit, was not worth acting on, given the pair's movement.

The latest COT report is dated February 24. The illustration on the weekly timeframe clearly shows that the net position of non-commercial traders remains "bullish," and since Trump took office as President of the US for the second time, only the dollar has been falling. We cannot say with 100% certainty that the decline of the American currency will continue, but current events around the world suggest this is likely.

We still do not see any fundamental factors that would strengthen the European currency, while there are sufficient factors that would weaken the American currency. The global downward trend remains intact, but what relevance does it have to price movements over the last 18 years? Since September 2022, a new upward trend has formed, breaking the global downward trend line. Therefore, the path further upward is open.

The positioning of the red and blue lines of the indicator continues to indicate a retention of the "bullish" trend. Over the last reporting week, the number of longs for the "Non-commercial" group decreased by 16,700, while the number of shorts increased by 900. Consequently, the net position decreased by 15,800 contracts over the week.

On the hourly timeframe, the EUR/USD pair maintains a new downward trend amid geopolitical events in the Middle East. How long the dollar's rise will continue based solely on this factor is unclear, as it will depend on the intensity and duration of the war, losses on both sides, and the US's ability to achieve its objectives. However, we currently have a downward trend.

For March 6, we highlight the following trading levels: 1.1362, 1.1426, 1.1542, 1.1615-1.1625, 1.1657-1.1666, 1.1750-1.1760, 1.1830-1.1837, 1.1907-1.1922, 1.1971-1.1988, as well as the Senkou Span B (1.1800) and Kijun-sen (1.1678) lines. The Ichimoku indicator lines may move throughout the day, which should be taken into account when determining trading signals. It is recommended to set the Stop Loss order to breakeven once the price has moved in the correct direction by 15 pips. This will safeguard against potential losses if the signal turns out to be false.

On Friday, significant events in the Eurozone include a speech by Christine Lagarde and the publication of the final fourth-quarter GDP estimate. Neither event is the most significant or essential. In the US, more important reports, including NonFarm Payrolls, the unemployment rate, and retail sales, will be released. Therefore, in the second half of the day, a new "storm" on the currency market can be expected.

On Friday, traders may consider selling if the price consolidates below 1.1542 or bounces from the 1.1615-1.1625 area. Long positions can be considered if there is a bounce from the level of 1.1542 or if the price consolidates above the area of 1.1615-1.1625.