To open long positions on EURUSD, you need:
In the first half of the day, no signals were formed to enter the market. If you look at the 5-minute chart, you will see that the test of the level of 1.1819, which I paid attention to in my morning forecast, occurred with a breakdown. However, there was no reverse update of this level from the bottom up. Accordingly, no entry point for short positions was formed. For the second half of the day, the levels remained unchanged, as well as the tactics. Most likely, traders will wait for the publication of the Non-Farm Employment report, and no active actions will be taken until then. Weak indicators on the US labor market will certainly help buyers of the European currency to regain control of the resistance of 1.1819, which they missed in the first half of the day. A test of this level from top to bottom forms an excellent signal for opening long positions in the expectation of restoring the pair to a larger level of 1.1845, just below which the moving averages that limit the upward potential pass. It will be possible to discuss a reversal of the downward correction only after buyers take this milestone, forming a similar test from top to bottom, which will push EUR/USD to the next maximum of 1.1872, where I recommend fixing the profits. If the labor market report turns out to be better than economists' forecasts, the pressure on the euro will continue. In this case, only the formation of a false breakdown in the new support area of 1.1800 will lead to the formation of a signal to open long positions. If the bulls fail to offer anything around 1.1800, it is best to postpone long positions until the next low of 1.1774, from which you can buy the pair immediately for a rebound, counting on an upward movement of 15-20 points within the day. The next major support is seen in the area of 1.1753.
To open short positions on EURUSD, you need:
Sellers continue to put pressure on the euro based on strong fundamental statistics for the United States. The bears' emphasis is now placed on the pair's decline to the area of 1.1800. Before selling the euro, I advise you to wait for the breakdown and update of this level from the bottom up and then open short positions to reduce to a larger minimum of 1.1774. I advise you to fix the profit there. The next target will be the area of 1.1753. However, we will be able to reach it only in excellent indicators for the number of people employed in the non-agricultural sector. In the case of EUR/USD growth during the US session, I advise you to look at the resistance of 1.1819, which the bulls missed today in the first half of the day. It is possible to open short positions only if a false breakdown is formed. I advise selling the pair immediately for a rebound based on a downward correction of 15-20 points only from the level of 1.1845, or even higher – from the maximum of 1.1872.
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 considered in the current COT report, so 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 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 below 30 and 50 daily moving averages, which indicates a small control of the sellers of the euro.
Note: The author considers the period and prices of moving averages 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 euro rises, the upper limit of the indicator in the area of 1.1845 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 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.
