To open long positions on EURUSD, you need:
In my morning forecast, I recommended selling the euro after the breakout and consolidation below the level of 1.1832, which happened. Let's look at a 5-minute chart. The lack of important fundamental statistics led to the continuation of the bearish momentum in the pair, which allowed us to increase short positions below the level of 1.1832. A break and consolidation below this range with a reverse test from the bottom up formed a good entry point for short positions, however, this did not lead to a major sell-off, as traders do not have further guidance due to the uncertainty with Brexit. Already closer to the beginning of the American session, the bulls managed to return to the level of 1.1832.
I do not recommend rushing to open long positions. A small increase above 1.1832 is required, and then a return to this range with its top-down test. Only this creates a convenient entry point for long positions with the expectation of resuming the upward trend. It will be possible to say that buyers have returned to the market only after they manage to pick up the level of 1.1868, fixing at which will be an additional signal to open long positions in the expectation of updating the maximum of 1.1915, where I recommend fixing the profits. If there is no activity from buyers above the level of 1.1868 in the second half of the day, and the pair again falls below this range after the release of good data on the US labor market, I recommend postponing long positions until the test of large support of 1.1797. You can open long positions in EUR/USD immediately on the rebound from the minimum of 1.1749, based on a correction of 15-20 points within the day.
To open short positions on EURUSD, you need:
The same task for sellers in the second half of the day is to break the level of 1.1832, which they failed to achieve during the European session. Only a consolidation below 1.1832, similar to the morning entry point for sales, and its test from the reverse side from the bottom up, form a more convenient signal for entering short positions in the expectation of resuming the downward trend. In this case, the nearest target of the bears will be at least 1.1797. A test of this level will only indicate that the pair is stuck in a side channel. Only a breakdown and consolidation below this range will lead EUR/USD to the lower border of the side channel 1.1749, where I recommend taking the profit. However, it will be possible to talk about the resumption of the bearish trend only after a complete breakout of this area, which will quickly push the pair to the minimum of 1.1701. If the bulls are stronger and continue to push EUR/USD up in the second half of the day, and this will happen only against the background of weak data on the US economy due to a sharp increase in the number of initial applications for unemployment benefits in the US, then it is best not to rush with sales, but wait for the update of the larger resistance of 1.1868. However, you can only sell from this level if a false breakout is formed there. I recommend opening short positions on EUR/USD immediately for a rebound only from the monthly maximum of 1.1915, based on a correction of 15-20 points within the day.
The COT report (Commitment of Traders) for November 10 recorded a reduction in long and short positions. Euro bulls are holding a wait-and-see attitude and are in no hurry to return to the market even after the presidential election in the United States. But despite this, buyers of risky assets believe in the continuation of the bull market, although they prefer to act cautiously. Thus, long non-commercial positions decreased from the level of 208,237 to the level of 202,374, while short non-commercial positions remained almost unchanged, falling from the level of 67,888 to 67,087. The total non-profit net position fell to 135,287, down from 140,349 a week earlier. It is worth noting that the delta has been declining for 7 consecutive weeks, which confirms the lack of desire of euro buyers to go to the market in the current conditions. Growth will only begin after Joe Biden's victory and his intentions to bestow the next largest monetary aid package of more than $ 2 trillion on the American economy begin to be realized.
Signals of indicators:
Moving averages
Trading is conducted below 30 and 50 daily moving averages, which indicates an attempt by the bears 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 classic daily moving averages on the daily chart D1.
Bollinger Bands
If the pair grows, the upper limit of the indicator around 1.1868 will act as a resistance.
Description of indicators
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
- MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
- Bollinger Bands (Bollinger Bands). Period 20
- Non-profit speculative traders, 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.
- Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
