To open long positions on EURUSD, you need:
In my morning forecast, I paid attention to the level of 1.1709 and recommended that you make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened. It is visible how good data on inflation in Germany support the euro, and the bulls are trying their best to prevent a breakthrough of 1.1709. After forming a false breakdown, an entry point into long positions is formed, which continues to operate at the time of writing, leaving buyers with a chance for an upward correction. From a technical point of view, nothing has changed except for the first level of support. As long as the trade is conducted above 1.1702, we can count on the euro's recovery in the short term. However, only the pair's decline and the next formation of a false breakdown form a new signal to open long positions against the trend, counting on an upward correction to the first resistance of 1.1729.
A break of this range and its reverse test from top to bottom will be a good entry point into long positions already in the continuation of the euro's growth with an update to the maximum of 1.1756, where I recommend fixing the profits. Such a movement can be counted on in the case of weak data on the US economy. However, it would be best to remember that traders can ignore the indicator on the housing market index. Just below the area of 1.1756, there are moving averages that will limit the upward potential of the pair. In the scenario of a decline in EUR/USD in the afternoon and a lack of activity in 1.1702, you can open long positions in EUR/USD after a false breakdown in the area of 1.1676. However, I advise you to buy EUR/USD immediately for a rebound only at the minimum of 1.1652 or even lower - in the area of 1.1628, counting on an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need:
Sellers of the euro still lack the "spirit" after a major drop observed on Friday evening and Monday morning. The primary task now is to protect the resistance of 1.1729, which buyers will target in the second half of the day. The formation of a false breakdown can lead to the formation of a signal to open short positions in the continuation of the bear market and with the initial goal of reducing to the area of the morning support of 1.1702. The next task of the bears during the American session will be to return this level under control. Its breakthrough and a reverse test from the bottom up with strong indicators on the US housing market will return pressure on the pair and form a signal to sell the euro with a fall to a minimum of 1.1676. A more distant target will be the area of 1.1652. However, such a powerful downward movement can be counted on today only after the speeches of the Federal Reserve System representatives. If EUR/USD rises in the afternoon and there is no activity at 1.1729, it is best to postpone selling until the test of a larger resistance of 1.1756. 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 1.1787.
Signals of indicators:
Moving averages
Trading is conducted below 30 and 50 daily moving averages, which indicates that the euro will continue to decline in the short term.
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 1.1702 will increase pressure on the euro and lead to a larger downward correction of the pair. In the case of growth, the upper limit of the indicator in the area of 1.1735 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.
