EUR/USD Analysis – 5M Chart

On Thursday, the EUR/USD currency pair once again failed to break above the 1.1261–1.1274 level and, consequently, exit the sideways channel and begin a logical and technically justified upward trend. As can be seen, the euro still cannot manage even a corrective recovery. After declining by 600 points, the price has been trading sideways for a month. Thus, the euro remains at the bottom of the market and has little chance of appreciating until traders change their attitude toward the currency. It is worth recalling that the pound has been trading much more consistently than the euro in recent weeks. The ECB is also raising interest rates, just like the Bank of England and the Federal Reserve. The point is that the euro's current market position clearly does not reflect the news background of the past several months. Conditions in Europe are not entirely favorable, but positive developments are also emerging. The situation in the United States, however, is currently highly unstable and unpredictable. Therefore, the outlook remains unfavorable for further US dollar appreciation. Nevertheless, the price remains within the sideways channel. Following the rebound from its upper boundary, a decline toward the lower boundary would be a logical scenario. There were no significant fundamental or macroeconomic events in the European Union or the United States yesterday.

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

One sell signal was formed on the 5-minute timeframe on Thursday. At the very beginning of the European trading session, the price rebounded from the 1.1261–1.1274 level, allowing traders to open short positions. By the end of the day, the pair had declined by 25–30 points.

COT Report

The latest COT report is dated October 27. The weekly timeframe chart clearly shows that the net position of non-commercial traders remains bearish and declined significantly in 2026 due to geopolitical developments. Traders have been reducing their exposure to the euro in favor of the US dollar over the past eight months. Donald Trump's policies have not changed, but the dollar temporarily served as a safe-haven currency.

However, there are still no fundamental factors supporting further US dollar appreciation. The war in the Middle East temporarily made the dollar exceptionally attractive, while the Federal Reserve's monetary policy stance provided another boost to the US currency this year. Over the long term, the euro could decline as far as the 1.08 level (the trendline), but the upward trend would still remain valid. Nevertheless, in recent months, the market has been taking only positive factors for the dollar into account while ignoring all others.

The positioning of the red and blue indicator lines points to bearish dominance. During the latest reporting week, the number of long contracts 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 over the week.

EUR/USD Analysis – 1H Chart

On the hourly timeframe, EUR/USD has the potential to develop an upward trend, but the pair remains within a sideways channel for now. A look at the daily and weekly timeframes suggests that the potential for a strong and prolonged trend remains considerable. However, the euro can only appreciate if market participants are willing to buy it. Over the past two months, there has been little interest in buying European currency. As long as the price remains within the sideways channel, an upward trend cannot be confirmed.

For November 6, 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. The Senkou Span B (1.1183) and Kijun-sen (1.1184) lines are also relevant. 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 to breakeven once the price has moved 15 points in the favorable direction. This helps protect against potential losses if the signal proves false.

On Friday, the European Union will publish a relatively minor retail sales report, while the United States will release the much more important labor market and unemployment reports. Average earnings data and the University of Michigan Consumer Sentiment Index will also be published. Therefore, significant market volatility is likely during the second half of the day.

Summary of the Analysis:

Traders may consider short positions with a target near 1.1115, as the price has once again failed to break above the 1.1261–1.1274 level, while the Ichimoku indicator lines provide weak signals under current sideways market conditions. If the price rebounds from the Kijun-sen or Senkou Span B line, a target of 1.1261–1.1274 may be considered for long positions.

Explanations for the Charts:

Support and resistance levels are represented by thick red lines. Price movements may end near these levels, but they do not serve as sources of trading signals.

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

Extremum 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.