To open long positions on EURUSD, you need:
In the first half of the day, buyers of the European currency took advantage of the moment and tried to "pull the blanket" to their side, standing on the protection of the support of 1.1705. However, it did not work out very well. Let's look at the 5-minute chart and talk about what happened. A false breakdown at this level led to the formation of a signal to open long positions. However, after passing 10 points up, the demand for the euro quickly decreased. A repeated test of this area led to a breakdown. However, I did not wait for the reverse update of 1.1705, which forced me to miss the euro's downward movement. It was not enough just a little bit before the test of the level of 1.1684, which is revised for the second half of the day. Data on lending in the eurozone turned out to be slightly better than economists' forecasts. However, this did not particularly help the euro. The focus in the second half of the day will be shifted to the speech of the President of the European Central Bank, Christine Lagarde, as well as on the points of monetary policy, which will be voiced during the interview by representatives of the Federal Reserve System. Buyers of the euro, who managed to protect the lower border of the channel in the area of 1.1687, need to try to return the market under their control. Therefore, during the American session, it is so important to cling to the resistance of 1.1713. A breakout and a test of this level from top to bottom forms a good entry point into long positions to increase the pair to the area of 1.1736, and then to the upper border of the side channel of 1.1756, where I recommend fixing the profits. A longer-range target will be a maximum of 1.1775. If the pressure on the euro returns in the afternoon, then the primary task of the bulls will be to protect the level of 1.1687. Only the next formation of a false breakdown there will lead to the formation of a signal to open long positions in the expectation of an upward correction. In the scenario of the absence of bull activity at this level, I advise you to postpone purchases to a new low in the area of 1.1665. It is possible to open long positions immediately for a rebound only at the new local support of 1.1628, or even lower - in the area of 1.1604, counting on an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need:
Bears are trying to take control of the market and it is necessary to increase their presence. The first test of 1.1687 was unsuccessful. Thus, only a break and consolidation below this range in the second half of the day, together with a reverse test from the bottom up, form an additional sell signal for EUR/USD to update the next local minimum of 1.1665. A break in this range will also open a direct road to new levels of 1.1628 and 1.1604, where I recommend taking the profit. If EUR/USD rises in the second half of the day after the speech of the chairman of the Federal Reserve System, the bears will need a lot of effort to protect the resistance of 1.1713, which was formed following the results of the European session. Only the formation of a false breakout on it forms a good entry point into short positions. In the scenario of the absence of sellers at the level of 1.1713, it is best to postpone sales until the test of a larger resistance of 1.1736. I advise you to open short positions immediately for a rebound based on a downward correction of 15-20 points only from the new maximum of 1.1756.
The COT report (Commitment of Traders) for September 14 recorded a reduction in both long and short positions. All this is a consequence of the wait-and-see attitude of traders in the early autumn of this year when the Federal Reserve System can shed light on its further monetary policy. A lot will now depend on how the US authorities solve the problem of the national debt limit, which is already putting pressure on stock markets, returning demand for the US dollar, which harms risky assets. This week, the situation on this issue should somehow become clearer. The demand for risky assets is also limited due to the high probability of another wave of the spread of the coronavirus, and its new Delta strain. All this will force 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 EUR/USD pair. The COT report indicates that long non-commercial positions decreased from the level of 189,904 to the level of 186,554, while short non-commercial positions decreased from the level of 163,596 to the level of 158,749. At the end of the week, the total non-commercial net position rose slightly to 27,805 from the level of 26,308. The weekly closing price fell from 1.1870 to 1.1809.
Signals of indicators:
Moving averages
Trading is already below 30 and 50 daily moving averages, which indicates an attempt by the bears to regain control of the market.
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
If the pair grows, the upper limit of the indicator in the area of 1.1736 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 certain 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.
