To open long positions on EUR/USD, you need:
Last Friday, after good data on the PMI index for the eurozone services sector, the bears tried to renew pressure on the euro. However, with every false breakout, major players did not provide help, which ultimately led to trading week ending above the range of 1.1241. We see active purchases of the European currency from this level in the Asian session. If the pair falls during the first half of the day, a repeated test of the 1.1241 area and forming a false breakout there will be a signal to open long positions in the hope of continuing to strengthen EUR/USD to last week's high in the area of 1.1297. An equally important task is to break through and consolidate in this range, which will cause the euro to grow further towards the high of 1.1346. However, its update will depend on how today's data on retail sales in the eurozone and the level of investor confidence turns out. If the pressure on the euro returns in the first half of the day, and the bulls are not active in the support area of 1.1241, it is best to wait for another decline to the area of 1.1193 and buy EUR/USD there immediately for a rebound based on a correction of 25-30 points within the day.
To open short positions on EUR/USD, you need:
Euro sellers will be waiting for weak data on retail sales in the eurozone and a poor report on the US services sector. However, returning the pair to the sub-area of support of 1.1241, which is a kind of middle of the side channel of the previous week, and consolidating under it will be a signal to open short positions. This scenario will lead to a repeated decline in EUR/USD to the low of 1.1193, the next test of which will increase pressure on the euro and sharply pull down the pair to the lows of 1.1155 and 1.1106, where I recommend taking profits. If the bears are not active in the 1.1241 area, it is best to postpone short positions until the upper limit of the 1.1297 channel is updated, to which the pair is now gradually approaching. However, forming a false breakout on it will be a signal to sell the euro. Bigger players will return to the market from the high of 1.1325, a test of which can lead to a downward correction of EUR/USD of 25-30 points within the day.
Indicator signals:
Moving averages
Trading is conducted above 30 and 50 moving averages, which indicates that the bulls are trying to return to the market.
Note: the period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.
Bollinger Bands
If the pair declines, the lower border of the indicator around 1.1215 will provide support.
Description of indicators
- Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
- Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
- MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period to 26. SMA period 9
- Bollinger Bands (Bollinger Bands). Period 20
- Non-commercial traders are speculators, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
- Long non-commercial positions represent the total long open position of non-commercial traders.
- Short non-commercial positions represent the total short open position of non-commercial traders.
- The total non-commercial net position is the difference between short and long positions of non-commercial traders.
