To open long positions on EURUSD, you need:
According to the results of the first half of the day, nothing has changed in the pair from a technical point of view. In the absence of important fundamental statistics, data on producer prices in the eurozone were ignored, and volatility remained at the lowest level in recent times of 20 points. Accordingly, there were no signals for entering the market since the levels I indicated were not tested. Let's look at the 5-minute chart. When preparing the forecast, the euro was hooked at 1.1888, and all that remains is to count on the formation of a false breakdown. It is also not worth waiting for the active actions of the bulls in the second half of the day since there are no plans to release fundamental statistics that can lead to a surge in volatility. Only a consolidation at the level of 1.1888 with a reverse test from top to bottom forms a signal to open long positions in the expectation of continuing the upward trend to the maximum of 1.1908, from which it will be quite easy to get out to larger resistances. A breakdown of this area with a similar consolidation will form an additional entry point for purchases, which will lead EUR/USD to new local levels of 1.1937 and 1.1984, where I recommend fixing the profits. If the bulls fail to offer something above 1.1888, the option of reducing the pair in the second half of the day is not excluded. In this case, long positions can be opened if a false breakdown is formed in the support area of 1.1866. You can buy EUR/USD immediately for a rebound only after the first test of the minimum of 1.1843, or even lower - from the level of 1.1824, counting on an upward rebound of 15-20 points within the day.
To open short positions on EURUSD, you need:
Sellers are not in a hurry to cope with the task assigned to them yet. It will be possible to say that they managed to protect the resistance of 1.1888 only after returning to this level, which will lead to the formation of a false breakdown and a signal to open short positions. Good data on the US economy will help in this. But given that the nature of the news is not very important for the foreign exchange market, we can continue to trade around 1.1888. In the case of a decline in the pair after a false breakdown of the level of 1.1888, the initial target of the bears will be support, located at today's minimum in the area of 1.1866. It is very difficult to talk about its breakdown on such volatility. However, if this happens, I recommend waiting for this level to update from the bottom up and then opening short positions to reduce the euro to a larger minimum of 1.1843. I advise you to fix profits. In case of further growth of EUR/USD during the US session and the lack of activity of sellers in the area of 1.1888, it is best to open short positions only when a false breakdown is formed at a new local maximum 1.1908. I advise you to sell the pair immediately for a rebound based on a downward correction of 15-20 points only from the level of 1.1937.
In the COT report (Commitment of Traders) for July 27, the market continued to be skewed towards sellers of risky assets. Long positions decreased, and short positions increased, which led to another decrease in the overall positive net position. The results of the Federal Reserve meeting indirectly affected the direction of the euro. However, given the wait-and-see position of the committee, fewer people were willing to buy the US dollar. The data on US GDP and the eurozone were quite different: in the US, the report fell short of economists' forecasts, and in the eurozone, on the contrary – the indicator turned out to be better than forecasts, which led to the growth of the euro. However, this fact is no longer taken into account in the current COT report. Thus, it seems that the balance of power remains on the side of the bears. The COT report indicates that long non-commercial positions decreased from the level of 208,669 to 202,245, while short non-commercial positions increased from the level of 162,847 to the level of 164,119. Only at the end of this week, we are waiting for important fundamental statistics on the change in the number of people employed in the non-agricultural sector of the United States of America, which can significantly affect the direction of the EURUSD pair. Good data will become a powerful bullish impulse for the US dollar, which will strengthen its position as the Federal Reserve System continues to refer to the weak pace of labor market recovery in its forecasts. The total non-commercial net position decreased from the level of 45,822 to the level of 38,126. But the weekly closing price rose slightly from the level of 1.1791 to 1.1804.
Signals of indicators:
Moving averages
Trading is conducted slightly above the 30 and 50 daily moving averages, which indicates another attempt by the bulls to continue the growth of the euro.
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
In case of a decline in the pair, the lower border of the indicator in the area of 1.1866 will provide support.
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.
