EUR/USD Analysis: 5-Minute Chart

The EUR/USD currency pair continued moving upward on Wednesday, but only within the sideways channel clearly visible on the hourly timeframe. Essentially, this was a typical movement within a sideways range, from the lower boundary of the channel to the upper boundary. The US elections, the European Union's inflation report, and the ADP and ISM reports in the United States had virtually no impact on the European currency. In fact, the market largely ignored all macroeconomic data released throughout the day. For example, the European Union's October inflation report came in line with analysts' forecasts. However, this does not change the fact that inflation increased again and now stands at 4%. Even if the market had anticipated this figure, the European currency should have started appreciating beforehand. However, the euro has remained near its market lows for a month and has shown no willingness to recover. Thus, the inflation report increased the likelihood of a third and even a fourth round of monetary policy tightening by the ECB, but this had no impact on the euro. The market simply continues to avoid buying the currency. The same applies to the US reports. For example, the most important indicator, the ISM Services PMI, came in below expectations, but this did not prevent the US dollar from appreciating during the second half of the day. Consequently, the euro is currently showing virtually no reaction to positive factors or any other market developments.

From a technical perspective, the downward trend may have ended, as the second descending trendline has already been broken. However, the price remains within the sideways channel of 1.1115–1.1261, so the outlook for the European currency remains uncertain. A rebound from the upper boundary of the channel could trigger another decline in the euro, regardless of the prevailing news background.

Three sell signals formed on the 5-minute timeframe on Wednesday. Therefore, traders had opportunities to open short positions. However, volatility was relatively low throughout the day, meaning that only the third signal offered a potential trading opportunity, with the trade closed manually toward the end of the evening.

COT Report

The latest COT report is dated October 27. The weekly timeframe illustration clearly shows that the net position of non-commercial traders remains bearish and declined significantly in 2026 due to geopolitical developments. Over the past eight months, traders have been reducing their exposure to the European currency in favor of the US dollar. Donald Trump's policies have not changed, but the dollar temporarily benefited from its status as a reserve currency.

However, there are still no fundamental factors supporting further strengthening of the US dollar. The conflict in the Middle East temporarily made the dollar particularly attractive, while the Federal Reserve's monetary policy stance provided another surprise in favor of the dollar for the second time this year. Over the long term, the euro could decline as far as 1.08 (the trendline), but the upward trend would still remain intact. However, over the past few months, the market has been taking into account only factors supporting the dollar while ignoring all other developments.

The positions of the red and blue lines of the indicator point to a bearish advantage. During the latest reporting week, the number of long positions held by the "Non-commercial" group increased by 4,200, while the number of short positions increased by 13,600. Consequently, the net position declined by another 9,400 contracts over the week.

EUR/USD Analysis: 1-Hour Chart

On the hourly timeframe, the EUR/USD pair has the potential to establish an upward trend, but it remains within a sideways channel for now. Looking at the daily and weekly timeframes, it becomes clear that the probability of a strong and prolonged trend remains high. However, the European currency needs buying interest to appreciate. Over the past two months, the market has shown little interest in buying the euro. As long as the price remains within the sideways range, an upward trend cannot be confirmed.

For November 5, the following trading levels are identified: 1.1006, 1.1115, 1.1154–1.1165, 1.1261–1.1274, 1.1362–1.1368, 1.1461–1.1473, 1.1536–1.1542, 1.1585, and 1.1657–1.1665, as well as the Senkou Span B (1.1183) and Kijun-sen (1.1184) lines. The Ichimoku indicator lines may shift throughout the day, which should be taken into account when identifying trading signals. Traders should also remember to move the Stop Loss order to breakeven once the price has moved 15 pips in the favorable direction. This helps protect against potential losses if the signal proves false.

On Thursday, ECB President Christine Lagarde is scheduled to deliver a speech in the European Union. However, this event is not considered particularly significant for the euro. The market continues to ignore all bullish and hawkish factors supporting the European currency. In the United States, today's economic calendar contains no significant events.

Summary of the Analysis Above:

Traders may consider short positions with a target near 1.1184 if the price rebounds from the 1.1261–1.1274 level once again. If the price consolidates above the 1.1261–1.1274 level, a target of 1.1362–1.1368 may be considered for long positions.

Explanations for the Illustrations:

Support and resistance levels are represented by thick red lines around which price movements may end. They are not sources of trading signals.

The Kijun-sen and Senkou Span B lines are Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are considered strong technical levels.

Extreme levels are represented by thin red lines from which the price has previously rebounded. They serve as sources of trading signals.

Yellow lines represent trendlines, trend channels, and other technical patterns.

Indicator 1 on the COT charts shows the size of the net position held by each category of traders.