To open long positions on EURUSD, you need to:
In my morning forecast, I paid attention to the resistance of 1.1939 and said that the pressure on the European currency may continue. Let's look at the 5-minute chart and talk about what happened. In the absence of important fundamental statistics, as yesterday, the bulls attempted to grow above the resistance of 1.1939, which was exactly 1 point short of the test, which is quite unpleasant. I was ready to open short positions only when a false breakout was formed. Therefore, I was forced to miss all the downward movement that is now observed in the support area of 1.1884.
Given that trading continues to be conducted in the middle of the channel of 1.1884-1.1939, the strategy for the second half of the day remains the same as for the first. No important fundamental statistics are scheduled to be published during the US session, and there are no speeches by representatives of the world's central banks, so the focus will continue to be purely on technical analysis. The primary task of buyers is to return to the control of the resistance of 1.1939, below which are the moving averages that play on the side of the sellers of the euro. Only a test of this level from top to bottom will form a convenient entry point into long positions, counting on the growth of EUR/USD in the area of the maximum of 1.1989, where I recommend fixing the profits. The next major resistance is seen in the area of 1.2047, however, it will not be so easy to get to it, especially against the background of another increase in US bond yields, which helps the US dollar to strengthen its position. At the time of writing, there is a downward correction of EUR/USD, so it is best to open long positions only after the formation of a false breakout in the area of 1.1884, where the lower border of the current side channel passes. If there is no activity on the part of the bulls, I recommend postponing long positions for a rebound immediately from the larger minimum of 1.1838, counting on an upward correction of 20-25 points within the day. A test of this level will completely cancel out all the bulls' plans for the rapid growth of the euro.
To open short positions on EURUSD, you need to:
The bears coped with the morning task and did not let the pair go above the resistance of 1.1939. However, as noted above, it was not possible to wait for the formation of a false breakout at this level, since we did not reach exactly 1 point. Now the sellers of the euro are focused on the lower border of the side channel 1.1884. Given that important fundamental statistics are not expected to be released today, the pressure on the euro is likely to continue in the second half of the day. A break and consolidation below 1.1884 will quickly push EUR/USD to a minimum of 1.1838, where I recommend taking the profits. If the sellers of the euro do not show much activity and allow the bulls to return the pair to the resistance area of 1.1939, then I recommend opening short positions after the same false breakdown. A larger increase above the level of 1.1939 will lead to an update of the maximum of 1.1989, from where you can sell EUR/USD immediately on the rebound with the aim of a downward correction of 20-25 points within the day.
Let me remind you that the COT report (Commitment of Traders) for March 9 clearly shows how there is a sharp reduction in long positions and a very large increase in short positions, which indicates a continued shift of the market towards sellers of risky assets. This is confirmed by the chart of the fall of the euro, which we have been watching since the end of February this year. The sharp rise in bond yields of many developed countries continues, which plays in favor of the US dollar, as investors expect that the United States will be the first to start raising interest rates, which makes the US dollar more attractive. The recent meeting of the European Central Bank did not change the market, as the decisions taken were not critical and did not affect the mood of investors. It is best not to rush into buying euros but to wait for lower prices. Another medium-term pressure on the euro is the repeated increase in the incidence of coronavirus. The slow vaccination program is pushing the lifting of quarantine measures to a later date. Only with the lifting of restrictions and the restoration of the service sector can we expect an improvement in the economic prospects of the eurozone, which will return the medium-term trend to the strengthening of the EUR/USD. The COT report shows that long non-profit positions declined to 207,588 from 222,655, while short non-profit positions rose from 96,667 to 105,624. As a result, the total non-commercial net position declined again for the fourth week in a row to 101,964 from 125,988. The weekly closing price was 1.1812 against 1.2048 a week earlier.
Signals of indicators:
Moving averages
Trading is conducted below the 30 and 50 daily moving averages, which indicates an attempt by the bears to continue the downward movement of the pair.
Note: The period and prices of the 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 grows in the second half of the day, the upper limit of the indicator in the area of 1.1939 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.
