The EUR/USD currency pair was in absolute flat on Friday. The volatility of the day was only 48 points, which is very low even for a completely empty day, in terms of macroeconomic statistics. However, Friday was not such a day. At least two major reports have been published in the US and the EU. NonFarm Payrolls and inflation. Thus, even if these reports were neutral, traders could count on strong movements. However, instead they got an absolute flat. The pair simply continued the weak movement that started days earlier, and by the end of the day and the week it slipped to the level of 1.1038. There was a rebound from this level, but it does not change the overall picture of the state of affairs. The European currency will still tend to fall against the dollar due to the difficult geopolitical situation and because of the negative fundamental background for itself. Inflation in the EU, by the way, has already risen to 7.5% y/y and has almost caught up with US inflation. This could mean that the European Central Bank could start tightening its monetary policy soon (which could push the euro higher), but ECB President Christine Lagarde has said many times that the central bank will not raise rates this year. Therefore, the euro did not derive any benefit for itself.
The nature of the pair's movement, which we mentioned, is even more visible on the 5-minute timeframe. It is an absolute flat between the levels of 1.1070 and 1.1038. Since the European trading session, the pair has rebounded at least three times from the first and three times from the second. At the same time, it cannot be said that the price moved from one level to another. Rather, there was a sluggish fall of the euro. Unfortunately, but not surprisingly, nothing could be earned from this movement. The first three sell signals ended with the opening of two short positions, each of which was closed by Stop Loss at breakeven, because the price went down 20 points at least twice, but failed to work out the nearest target level of 1.1038. By the beginning of the US trading session, it became clear that the market was ignoring macroeconomic statistics, and the pair was in a flat. The first signal to buy from the level of 1.1038 should not have been worked out, since the Nonfarm Payrolls report was released in America at this time. All subsequent signals had to be ignored, because after the lack of reaction to the report, it became absolutely clear that there would be no movement.
How to trade on Monday:
On the 30-minute timeframe, the pair is correcting as part of a still ongoing, very formal upward trend. Unfortunately, there is no trend line or channel at the moment, so the trend is determined "by eye". The fundamental and geopolitical backgrounds continue to speak in favor of the fall of the European currency, and we expect such a development of events in the new week, unless there are optimistic news from Ukraine or Russia. On the 5-minute TF tomorrow it is recommended to trade at the levels of 1.0966, 1.1038, 1.1070, 1.1132. When passing 15 points in the right direction, you should set Stop Loss to breakeven. Neither the EU nor the US is scheduled for a single important event or report on Monday. Thus, there may be a slight movement and slight volatility during the day. However, in general the market is still in an excited state, so you need to be prepared for surprises.
