The EUR/USD currency pair started the new week with a relatively strong upward surge, which ended within an hour of its start. For the remainder of the day, the EUR/USD pair traded predominantly sideways, with minimal volatility that has been decreasing day by day. Thus, the market reacted, for form's sake, to Sunday's statements from Donald Trump about the proximity of a peace agreement with Iran and the reopening of the Strait of Hormuz, but it did not place much faith in them. This market attitude towards the U.S. president's statements is not surprising. If even 50% of Trump's statements were consistently fulfilled and reflected reality, perhaps traders would trust his words more often. Therefore, the market preferred to wait for official announcements about the signing of the aforementioned memorandum or at least confirmations from Tehran, which did not come on Monday.
From a technical standpoint, a downward trend persists. The price is located below the Senkou Span B line, and a trendline is still impossible to establish. Thus, we will only consider the downward trend complete after the Senkou Span B line is overcome. Without the signing of the memorandum, it will be difficult for the euro to rise above this line.
In the 5-minute timeframe on Monday, no trading signals were generated, and the illustration above shows the pair moved exclusively sideways all day. There were no grounds for traders to open any positions yesterday.
Analysis of EUR/USD 4H:On the 4-hour timeframe using the ICT trading system, the price generated a buy signal in a "bullish" order block last week, and on Monday, a new bullish FVG formed and received a reaction. Thus, over the past two days, at least two buy signals have been formed, which traders could easily execute. The first signal has already yielded a profit, while the second may provide gains this week. The main thing is that geopolitics does not hinder the euro from showing at least modest growth.
Analysis of EUR/USD 1H:On the hourly timeframe, the EUR/USD pair continues to form a downward trend. The situation in the Middle East remains tense, but it is not worsening, and Washington and Tehran may sign a preliminary agreement this week. If no new signs of escalation appear in the Middle East and the memorandum is indeed signed, the dollar will begin to lose ground.
For May 26, we highlight the following levels for trading: 1.1362, 1.1426, 1.1542, 1.1615-1.1625, 1.1657-1.1666, 1.1750-1.1760, 1.1786, 1.1830-1.1837, 1.1907-1.1922, as well as the Senkou Span B line (1.1686) and Kijun-sen (1.1614). The lines of the Ichimoku indicator may move throughout the day, which should be considered when determining trading signals. Don't forget to set your Stop Loss orders to breakeven if the price moves in the correct direction by 15 pips. This will protect against potential losses if the signal turns out to be false.
On Tuesday, there are no important events or reports planned in the EU or the U.S., and the market will continue to await geopolitical information and confirmations regarding the proximity of an agreement between Iran and the U.S. If there are no new updates, we are in for another dull day with minimal "movement."
Trading Recommendations:Today, traders may open short positions targeting 1.1615-1.1625 if the price bounces from the area of 1.1657-1.1666. Long positions can be opened if the price bounces from the area of 1.1615-1.1625, targeting the area of 1.1657-1.1666 and the Senkou Span B line. Long positions on the 4-hour timeframe are relevant after buy signals are formed in the order block and FVG.
Explanations for Illustrations:Price support and resistance levels – thick red lines, around which movement may conclude. They are not sources of trading signals.
Kijun-sen and Senkou Span B lines – lines of the Ichimoku indicator moved to the hourly timeframe from the 4-hour one. They are strong lines.
Extreme levels – thin red lines from which the price previously bounced. They are sources of trading signals.
Yellow lines – trend lines, trend channels, and any other technical patterns.
CHOCH – break in the trend structure.
Liquidity – liquidity, stop loss, and pending orders that market makers use to establish their positions.
FVG – price inefficiency area. Prices pass through such areas very quickly, indicating a complete absence of one side in the market. Subsequently, the price tends to return and react from these areas, continuing the main trend.
IFVG – inverted price inefficiency area. After returning to such an area, the price does not react to it; instead, it impulsively breaks through and then tests from the other side.
OB – order block. A candle in which the market maker opened a position to take liquidity and establish its own position in the opposite direction.