To open long positions on EURUSD, you need to:
In my morning forecast, I paid attention to the level of 1.2116 and recommended making decisions based on it. Let's look at the 5-minute chart and talk about what happened. And absolutely nothing happened. The bears sort of settled below 1.2116 and tested this area from the bottom up. However, the downward movement was no more than 20 points, after its good data on the index of business sentiment in Germany and the Eurozone returned demand for the euro. After the return to 1.2116, buyers entered the business, however, as we can see, after testing this level from top to bottom, the upward morning trend did not continue and trading remained in a narrow side channel.
Buyers of the European currency need to try hard to continue the growth of the euro without much reason. As long as trading is conducted above 1.2116, we can expect the EUR/USD to continue growing, and another false breakout there will be a reason to build up long positions. The main goal will be to return to the highs of last week in the area of 1.2175, which has already been tested twice for strength. The fact that the bulls did not achieve an update to this level yesterday, jeopardizing the continuation of the uptrend. If they fail to do so today, we can expect increased pressure on the Euro. Therefore, only the third test of 1.2175 will lead to continued growth of EUR / USD already in the area of highs 1.2255 and 1.2339, where I recommend fixing profits. If there is no bull activity in the area of 1.2116 in the afternoon, it is best not to rush with purchases, but wait for the update of the minimum of 1.2046. From this level, you can buy euros for a rebound based on a correction of 20-25 points within the day. A major support level is seen around 1.1986. A test of this low will lead to a reversal of the uptrend in the short term.
To open short positions on EURUSD, you need to:
At the moment, sellers of the pound are focused on the level of 1.2116. Only a return to this range, similar to the morning sale of the euro, which I analyzed above, forms a signal to open short positions with the aim of further decline to the area of the minimum of 1.2046, where I recommend fixing the profits. Fixing below this level with a test of it from the bottom up will be a good signal to sell EUR/USD to the area of a large minimum of 1.1986, and the longer-term goal of the bears will be to close in the support area of 1.1923, which will seriously affect the uptrend. In the afternoon, nothing important is published from the news, so it is likely that the focus will shift to Brexit news. If EUR / USD grows further from the level of 1.2116, it is better not to rush into sales. In this scenario, you can only count on short positions from the resistance of 1.2175 or sell EUR/USD from a new high in the area of 1.2255 with the aim of a downward correction of 15-20 points within the day.
Let me remind you that the COT report (Commitment of Traders) for December 1 recorded an increase in long and a reduction in short positions. Buyers of risky assets believe in the continuation of the bull market, and in the further growth of the euro after breaking the psychological mark in the area of the 20th figure. For example, long non-profit positions rose from 206,354 to 207,302, while short non-profit positions fell to 67,407 from 68,104. The total non-profit net position rose to 139,894 from 138,250 a week earlier. It is worth paying attention to the growth of the Delta, observed for the second week in a row, after its 8-week decline, which indicates a clear advantage for buyers and a possible resumption of the medium-term upward trend for the Euro. It will be possible to talk about a larger recovery only after European leaders agree with the UK on a new trade agreement. However, we did not get any good news last week, and we have an EU summit ahead of us, which will put the final point in this story. The euro will be supported by news about the lifting of restrictive measures for the Christmas holidays, as well as the absence of major changes in the monetary policy of the European Central Bank.
Signals of indicators:
Moving averages
Trading is,50 daily moving averages, which indicates the sideways nature of 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
Low volatility does not give signals to enter the market.
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 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.
- Total non-commercial net position is the difference between short and long positions of non-commercial traders.
