To open long positions on EURUSD, you need to:
In my morning forecast, I paid attention to the level of 1.1880 and recommended that you decide to enter the market from it. Let's look at the 5-minute chart and talk about what happened. It is visible how sellers perfectly protect the level of 1.1880, forming a false breakout and a signal to open short positions to continue the bear market. However, it was not possible to break through to the next monthly lows, and after falling by 25 points, the movement ended. Closer to the middle of the day, the bears managed to break above the level of 1.1880, but there was no reverse test of this area for entering long positions.
In the second half of the day, the technical picture has completely changed, and the bulls will now focus on the level of 1.1920, to which the pair is gradually recovering after the breakout of 1.1880. Fixing and testing this area from top to bottom on the volume, which I did not wait for today in the first half of the day at the level of 1.1880, forms a signal to open long positions in the expectation of continued growth in the area of the highs of 1.1961 and 1..2003, where I recommend fixing the profits. However, be careful with purchases at highs against the trend, as active sales of the euro may begin again in the afternoon, especially since the divergence on the MACD indicator has already fully worked itself out. In the case of a decline in the pair against the background of the absence of important fundamental statistics on the US economy, I recommend returning to long positions only after forming a false breakdown at the lows of this month in the area of 1.1852. I recommend opening long positions immediately for a rebound from the support of 1.1805 to expect an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need to:
As long as the trade is conducted below the resistance of 1.1920, the pressure on the euro will continue. The formation of a false breakout in the second half of the day against the background of the absence of important fundamental statistics on the US economy forms a signal to open short positions to continue the downward trend formed in the middle of last week. But the more important task of sellers is to break the minimum of 1.1852, which was not possible in the first half of the day. The breakdown and test of this area from the bottom up on the volume form an excellent signal to open short positions with the aim of further falling of EUR/USD to new lows of 1.1805 and 1.1769, where I recommend taking the profit. If the bulls break through the resistance of 1.1920 in the second half of the day, I recommend postponing short positions until the test of a new high of 1.1961, where you can immediately sell the pair for a rebound in the expectation of a downward correction of 15-20 points.
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, but 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, 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 threatens the short-term downward trend for 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
A break of the upper limit of the indicator in the area of 1.1896 will lead to a new wave of euro growth. A break of the lower limit in the area of 1.1852 will increase the pressure on the pair.
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.
