To open long positions on EURUSD, you need to:
In the first half of the day, the absence of important fundamental statistics led to the preservation of low volatility in the market, which was quite expected. The upcoming meeting of the Federal Reserve System may make significant adjustments to the direction of the EUR/USD pair, so everyone froze in anticipation of the results. If you look at the 5-minute chart, you will see that the levels that I paid attention to in my morning forecast are not tested. Respectively, there were no signals to enter the market. The technical picture remained unchanged.
The main task of the bulls is to protect the support of 1.2103, which they did well yesterday. Only the formation of a false breakout forms a signal to open long positions in the expectation of recovery to the resistance area of 1.2145, on which a lot also depends today. There are concerns that before the Federal Reserve meeting, the bulls may ignore the support level of 1.2103 and release the euro lower. It will also happen in strong data on the US housing market, which is expected in the afternoon. In this case, I recommend considering new long positions only for a rebound from the larger minimum of 1.2063. You can also buy EUR/USD in the next support of 1.2025 to expect an upward correction of 15-20 points within the day. If the bulls declare themselves in the second half of the day, in this case, their target will be the resistance of 1.2145. A breakout and consolidation above this range will lead the pair to the area of the maximum of 1.2190, where I recommend taking the profit. A more distant target will be the resistance of 1.2222.
To open short positions on EURUSD, you need to:
Bears need to think carefully about protecting the resistance of 1.2145, which buyers will target this afternoon. Given that important fundamental statistics are again published today only on the US economy, only strong reports will help sellers implement the scenario for a further decline in the euro. Only the formation of a false breakout at the level of 1.2145 forms a sell signal to reduce to the area of the local minimum of 1.2103, on which the breakdown of which quite a lot will depend. The test of 1.2103 from the bottom up will form an additional sell signal for EUR/USD in the expectation of a fall to the new support of 1.2063, where I recommend taking the profit. The next target will be a minimum of 1.2025. Suppose there is no bear activity in the area of 1.2145 during the US session today. In that case, I recommend postponing short positions until the resistance test of 1.2190, where you can immediately sell the pair for a rebound with the expectation of a downward correction of 15-20 points. The next serious level is at the new local resistance of 1.2253.
Let me remind you that the COT report (Commitment of Traders) for June 8 noted a reduction in both long and short positions. It pointed to profit-taking and the exit of traders from the market before the important meeting of the European Central Bank, which resulted in no changes in monetary policy. Many were concerned about what would happen to the bond-buying program. However, it remained unchanged, which did not allow euro buyers to keep the market under their control. The pair is now at risk of significantly adjusting their positions ahead of an important meeting of the Federal Reserve System, the results of which will set the direction of the market for the next few weeks. The dollar can only hope that this summer, the Federal Reserve will seriously talk about reducing the volume of bond purchases. If this does not happen, the risk appetite will increase, and we will see a recovery in the euro. The COT report shows that long non-profit positions declined from 237,360 to the level of 232,103, while short non-profit positions also fell from the level of 128,038 to 124,890. The more the European currency falls, the more interest it will arouse among traders. The eurozone economy will demonstrate excellent growth rates in the summer period, which will affect the prospects for its recovery after the coronavirus pandemic. The total non-profit net position decreased from 109,322 to 107,213. The weekly closing price also fell from 1.22326 to 1.21907.
Signals of indicators:
Moving averages
Trading is conducted in 30 and 50 daily moving averages, which indicates the sideways nature of the market so far.
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
The volatility is quite low, giving signals to enter the market before important fundamental events.
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 specific 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.
