To open long positions on EURUSD, you need:
In my morning forecast for the first half of the day, I paid attention to the level of 1.1711 and recommended that you enter the market from it. Let's look at the 5-minute chart and talk about what happened. It is seen how the bulls are trying to form a false breakdown in the area of 1.1727, which leads to the formation of a signal to buy the euro. However, there was no rapid upward growth of the pair. Moreover, after the data on inflation in Germany, the bears again pushed the trading instrument to the lows of the day, where trading is being conducted at the time of writing. The technical picture of EUR/USD has not changed seriously, except that the level of 1.1711 was "smeared" in the first half of the day, and it is not worth seriously focusing on it during the American session. A lot will depend on the US inflation data. If the indicator exceeds the forecasts of economists, this will lead to a decrease in the pair. The buyers' focus will be shifted to the support of 1.1682, where the euro will most likely go. The formation of a false breakdown forms a signal to open long positions to expect an upward correction of the pair. An equally important task for the bulls will be to return to the control of the resistance of 1.1738. A breakthrough of this area and its reverse test from top to bottom will form a signal to open long positions with the aim of growth already to the level of 1.1762, where I recommend fixing the profits. The further task of buyers will be to update the maximum of 1.1787. In the scenario of a further decline in EUR/USD during the US session and the absence of bull activity in the area of 1.1682, I advise you to wait for the update of the next major low of 1.1643. Or the level of 1.1604, from where you can buy EUR/USD immediately for a rebound, counting on an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need:
Sellers are still waiting on the sidelines and are not very active in the market. An unsuccessful attempt to break through the support of 1.1711 did not allow them to bring the euro to new lows. Thus, the focus will now be shifted to US inflation data. If the consumer price index turns out to be better than economists' forecasts, then a breakthrough of 1.1711 will quickly dump the euro to a new low in the area of 1.1682. A more distant target will be the area of 1.1643, where I recommend fixing the profits. If inflation does not demonstrate anything outstanding, the pair may bounce up to the resistance area of 1.1738. I advise you to open short positions only if a false breakdown is formed. You can sell EUR/USD immediately for a rebound from a larger local maximum of 1.1762, or even higher - in the area of 1.1787, counting on a correction of 15-20 points within the day.
There are no obvious changes in the balance of power in the COT report (Commitment of Traders) for August 3. Moreover, the lack of important fundamental statistics on the eurozone last week and the summer pause forced traders to take a wait-and-see position. The focus was shifted to the data on the US labor market, which was published at the end of last week. However, its results are not taken into account in this COT report. Thus, it seems that everything has remained unchanged. The market movement is again becoming bearish since the data on the number of people employed in the US non-agricultural sector turned out to be much better than economists' forecasts. It allows us to count on an earlier curtailment of the asset purchase program by the Federal Reserve System. Representatives of the committee have already started talking about this at the beginning of this week, whose speeches will continue throughout the week. The COT report indicates that long non-commercial positions decreased from 202,245 to the level of 199,067, while short non-commercial positions decreased from the level of 164,119 to the level of 161,060. By the end of this week, we are waiting for important fundamental statistics on inflation in the United States, which can seriously affect the direction of the EUR/USD pair. Many expect that the rate of inflation growth will slow down. If this happens, the euro will regain its position. If the data indicate the continuation of the rapid growth of the CPI – the US dollar continued to strengthen its position against the European currency. At the end of the week, the total non-commercial net position decreased from the level of 38,126 to the level of 38,007. The weekly closing price increased from the level of 1.1804 to the level of 1.1874.
Signals of indicators:
Moving averages
Trading is conducted below 30 and 50 daily moving averages, indicating a further decline in the euro and the trend.
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
A breakthrough of the upper limit of the indicator in the area of 1.1725 will lead to a new wave of euro growth. A break of the lower limit of the indicator in the area of 1.1711 will increase the pressure on the euro.
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.
