To open long positions on EURUSD, you need:
The forecasts from the European Commission, which were emphasized today in the first half of the day, did not surprise traders in any way, which kept the EUR/USD pair fairly low volatility. If you look at the 5-minute chart, you will see how the pair did not reach the levels I indicated in the morning. Therefore, there were no signals for entering the market in the first half of the day.
For the second half of the day, the technical picture in EUR/USD has not changed in any way, as well as the trading strategy. The focus of traders will be shifted to the minutes of the Federal Reserve System from the June meeting, where representatives of the committee discussed further monetary policy. The main focus will be shifted to raising interest rates and to the number of participants who voted for an earlier rate increase due to the risk of excessive inflationary pressure. To open long positions, the formation of a false breakdown in the support area of 1.1805 is best suited. The main goal for the bulls will be the recovery of EUR/USD to the middle of the side channel 1.1851. It is possible to count on a breakdown of this level only after the publication of the protocols and smeared guidelines for changes in the monetary policy of the US Federal Reserve. I recommend opening long positions in the continuation of growth above 1.1851 only after testing this level from top to bottom, which forms an additional buy signal to return the pair to a larger resistance of 1.1893, from which the entire fall of the euro was formed yesterday. The next target will be the area of 1.1930, where I recommend fixing the profits. In the case of weak buyer activity in the area of 1.1805 and strong protocols, it is best not to rush into purchases. I advise you to wait for the support update 1.1769 from where you can buy EUR/USD immediately for a rebound based on an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need:
The bears keep the market under their control, and they are very much counting on a breakdown of the support of 1.1805. All the emphasis in the afternoon will remain at this level. A consolidation below 1.1805 and a test of this area from the bottom up will form a good signal to open short positions in the continuation of the bear market with the aim of further falling of the pair to the minimum of 1.1769, the update of which will form a new downward trend in the euro and will open the opportunity to update local lows in the area of 1.1740 and 1.1715, where I recommend fixing the profits. If EUR/USD rises during the US session after the release of fundamental reports on the US economy, an equally important task for the bears will be to protect the resistance of 1.1851, in the area of which the moving averages are playing the sellers' side. The formation of a false breakout forms an entry point into short positions. In the absence of bear activity, it is best to postpone sales until the test of a larger resistance of 1.1893, where you can immediately sell the pair for a rebound based on a downward correction of 15-20 points. The next major resistance is located at a maximum of 1.1930.
Let me remind you that there were minor changes in the COT report (Commitment of Traders) for June 29. It was possible to observe a higher growth of short positions and only a slight recovery of long ones. After several meetings with central banks, the market is gradually recovering. However, buyers of risky assets are not ready to act, as they are afraid of changes in the monetary policy of the Federal Reserve System. The fact that the data on the labor market in the United States of America indicated an increase in the unemployment rate cooled the desire to buy the US dollar in the short term, which hurt the downward trend of the EUR/USD pair that we have observed recently. It suggests that until the autumn of this year, the regulator is unlikely to resort to changing the bond purchase program, which will negatively affect the prospects of the US dollar in the summer period. There is no desire among traders to buy the European currency since no one expects such measures from the European Central Bank either. Most likely, the pair will spend most of this week in a sideways channel with the prospect of a slight weakening of the US dollar. The COT report indicates that long non-commercial positions increased from the level of 207,863 to the level of 209,058, while short non-commercial positions increased from the level of 118,806 to the level of 121,912. Good data on the European economy this week may revive euro buyers, as everyone expects that the eurozone economy will show strong growth in the summer period. It is the key to a medium-term upward trend in the European currency. The total non-commercial net position decreased from the level of 89,057 to the level of 87,146. The weekly closing price increased from the level of 1.1.1912 to the level of 1.1928.
Signals of indicators:
Moving averages
Trading is conducted below 30 and 50 daily moving averages, which indicates an attempt by bears to reverse 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
The volatility has sharply decreased, which does not give signals for entering 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 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.
