EUR/USD 5-Minute Analysis
On Monday, the EUR/USD currency pair initially rose following Trump's announcement that tariffs on EU goods would increase to 50% starting June 1. However, the pair subsequently fell after Trump, following negotiations with Ursula von der Leyen, decided to postpone the tariff hike until July 9. According to Trump and von der Leyen, five weeks should be enough time to conduct effective negotiations and reach common ground. We believe that "common ground" doesn't necessarily have to be positive, but within a month and a half, it will be clear whether a trade deal between the U.S. and EU is even possible.
It is important to note that the EU does not allow itself to be pushed around but maintains a relatively soft stance. Europe is cautious about clashing with Donald Trump and recognizes his strong position. However, it is not willing to accept just any of his demands. Therefore, negotiations will likely be difficult, but there is a chance for agreement. The problem is that virtually no information about the negotiations is reaching the media, so the market will spend the next month and a half guessing how talks are progressing.
This spells more instability for the dollar. Traders are growing tired of opening new dollar short positions, only to close them the next day because Trump changed his mind. As a result, not everyone is closing their shorts — and not always. The U.S. currency remains under intense pressure, even without fundamental reason.
As for Monday's trading signals — there's nothing notable to highlight. The price didn't test a single level or line. During the European session, it came within reach of the 1.1426 level but didn't touch it.
COT Report
The latest COT report is dated May 20. The chart above clearly shows that the net position of non-commercial traders remained bullish for a long time. Bears barely gained dominance at the end of 2024 but quickly lost it. Since Trump took office, the dollar's value has been declining significantly. We cannot confidently say with 100% certainty that the dollar's decline will continue, but current global developments suggest that outcome.
No fundamental factors support the euro's strength; however, one significant factor contributes to the dollar's weakness. The long-term downtrend persists, though what does the trend even mean right now? The dollar could rise again once Trump ends his trade wars, but will he?
The red and blue lines have crossed again, indicating a renewed bullish sentiment in the market. During the latest reporting week, the number of long positions among "Non-commercial" traders decreased by 3,500, while short positions increased by 6,800. As a result, the net position fell by 10,300. However, the COT reports are released with a one-week delay. The market is once again actively buying now.
EUR/USD 1-Hour Analysis
The EUR/USD pair continues its new local uptrend in the hourly timeframe. The outlook for the U.S. dollar still depends entirely on the development of the global trade war. If trade deals are signed and tariffs are reduced, the dollar could begin a recovery. But right now, there are no peace agreements in sight. Trump continues to make erratic decisions and shocking statements, leaving markets in disbelief. The market expects the worst and no longer believes Trump. We need to observe a breakout below the trendline and the Ichimoku indicator lines to conclude that the uptrend has ended.
For May 27, the following levels are identified for trading: 1.0823, 1.0886, 1.0949, 1.1006, 1.1092, 1.1147, 1.1185, 1.1234, 1.1274, 1.1362, 1.1426, 1.1534, 1.1607, along with the Senkou Span B line (1.1214) and the Kijun-sen line (1.1322). The Ichimoku lines may shift throughout the day, so they should be accounted for when identifying signals. Don't forget to move your Stop Loss to breakeven once the price has moved 15 pips in your favor — this helps protect against false signals.
No significant events or reports are scheduled in the eurozone on Tuesday. In the U.S., a key report on durable goods orders will be released, but it stands no chance of helping the dollar. The greenback may rise momentarily by 40–50 pips, but its broader trend remains dependent entirely on Trump.
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.
