To open long positions on EURUSD, you need:
Nothing interesting happened in the first half of the day. Let's look at the 5-minute chart. It is seen that against the background of low volatility, no activity on the buyers and sellers was observed even after the release of several fundamental statistics on the eurozone. Low volatility remains, although, by the beginning of the American session, the bulls still managed to update the weekly highs. However, they did not reach the level of 1.1783. From a technical point of view, nothing has changed. A lot will now depend on the speech of Federal Reserve Chairman Jerome Powell at Jackson Hole. It will be very difficult to predict the pair's direction during Powell's statements, so it is best to navigate already on the spot. As for the technical picture for the American session, the primary task of the bulls remains to protect the support of 1.1755, which we did not reach quite a bit today and below which the moving averages are playing on the side of the bulls. The formation of a false breakdown forms an excellent signal to open long positions in the continuation of the pair's upward trend with the key goal of reaching a maximum of 1.1783. A more important task for the bulls will be a breakout and a reverse test from top to bottom of this level, which also forms a buy signal to restore to 1.1804, where I recommend fixing the profits. A more distant target will be the area of 1.1829, but this level will be available only after the speech of the head of the Federal Reserve System and the formation of a northern trend. In the scenario of a decline in EUR/USD in the afternoon and a lack of activity in the area of 1.1755, I advise you to postpone purchases and wait for the minimum update at 1.1727, which once again helped buyers of the European currency yesterday. You can open long positions in EUR/USD immediately on a rebound from the support of 1.1697, counting on an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need:
In the first half of the day, sellers today failed to deal with the level of 1.1755, which led to the preservation of the balance of buyers in the market and the continuation of the upward trend of EUR/USD. The calculation in the second half of the day will be for the speech of the chairman of the Federal Reserve System, where he can declare the need for an earlier curtailment of measures to support the economy and the bond purchase program. It will lead to bearish sentiment in the EUR/USD pair. The initial task of sellers remains to return the level of 1.1755 under control. A breakthrough and a reverse test of this range will return the pressure on the pair and form a sell signal for the euro to update the minimum of 1.1727. A more distant target will be the area of 1.1697, but such a powerful downward movement can be counted on today only after the speech of the chairman of the Federal Reserve System in Jackson Hole. In the event of further growth of EUR/USD in the US, the formation of a false breakdown at the level of 1.1783 forms the first signal to open short positions in the expectation of a return of the bear market. In the scenario of a lack of activity at the level of 1.1783, it is best to postpone sales until the test of a larger resistance of 1.1804. I advise you to sell the pair immediately for a rebound based on a downward correction of 15-20 points only from the maximum of 1.1829.
The COT report (Commitment of Traders) for August 17 showed a clear increase in traders' interest in the market, as long positions grew quite seriously. However, short positions remained almost unchanged, indicating that buyers of risky assets are feeling the bottom. The data on eurozone GDP and inflation released last week fully coincided with economists' forecasts, which is generally not bad since everything is going according to the expectations and plans of the European Central Bank. The situation changed in the direction of buyers after the publication of the minutes of the meeting of the Federal Reserve System of the United States of America, where the members of the committee's views on future policy were divided – this supported risky assets and led to a stop of the downtrend for the pair. The lack of guidance due to the new strain of Delta coronavirus and the incomprehensible reaction of the European economy forces the European Central Bank to continue to adhere to a wait-and-see position and maintain a stimulating policy at current levels, which limits the upward potential of the pair. The COT report indicates that long non-commercial positions increased from the level of 212,809 to the level of 233,529, while short non-commercial positions decreased from the level of 178,952 to 175,889. At the end of the week, the total non-commercial net position increased from the level of 33,857 to the level of 57,640. The weekly closing price also rose from 1.1736 and 1.1777.
Signals of indicators:
Moving averages
Trading is conducted above 30 and 50 daily moving averages, which indicates the continuation of the euro's growth.
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 break of the lower limit of the indicator in the area of 1.1755 will increase the pressure on the euro and lead to a larger downward correction of the pair. A break of the upper limit of the indicator in the area of 1.1770 will lead to a new wave of growth.
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.
