To open long positions on EURUSD, you need:
In my morning forecast, I paid attention to the level of 1.1403, and also recommended that it make decisions on entering the market. Let's look at the 5-minute chart and figure out what happened. The decline in this area in the first half of the day after the data on Germany and France forced buyers to defend this level once again, which led to the formation of a signal to open long positions. As a result, the growth was about 40 points, after which the bulls rested on the morning resistance of 1.1444. And what were the entry points for the pound this morning?
During the American session, not particularly important data on changes in the volume of stocks in wholesale warehouses in the United States are released, which may maintain demand for risky assets, including the European currency. Interviews with representatives of the Federal Reserve System will be very important, which will remind traders about tomorrow's report on the US consumer price index. As noted above, euro buyers have every chance of continuing growth in the short term, but this requires going beyond the average border of the side channel. The optimal scenario for buying will be the option of another decline and the formation of a false breakdown at 1.1403, which will give a good entry point by analogy with the morning purchase. If the statements of the representatives of the Federal Reserve System are hawkish, the pair may go down to this level in the afternoon. An equally important task during the American session will be to control the middle of the 1.1444 channel. A break of this range and consolidation above, as well as a top-down test of 1.1444, will lead to an additional buy signal and open up the possibility of recovery to the area of this month's maximum - 1.1481. However, it is unlikely that the bulls will stop there. Therefore, the breakdown of this range will open a direct road to 1.1514 and 1.1562, where I recommend fixing the profits. If the pair declines during the American session and there is no activity at 1.1403, it is best to postpone purchases to 1.1363. However, I advise you to open long positions there when forming a false breakdown. You can buy the euro immediately for a rebound from the 1.1336 level with the aim of an upward correction of 20-25 points within a day.
To open short positions on EURUSD, you need:
Sellers tried to declare themselves again, but nothing came of it - there are a lot of people who want to buy euros with every good decline against the background of a bullish trend. For this reason, it was not possible to break below 1.1403. As a result, we are now watching the bulls' attempts to regain control of 1.1444. Reports on the American economy are unlikely to help sellers, so they need to try not to miss 1.1444, since they also do not have to count on active actions of bears after the speech of FOMC members Michelle Bowman and Loretta Mester. Give 1.1444 - they will completely lose the initiative. In the case of strong US data and the formation of a false breakdown at 1.1444, all this will increase pressure on the pair and form the first entry point into short positions with the aim of re-lowering EUR/USD to the area of 1.1403. A breakdown and a bottom-up test of this range will give an additional signal to open short positions already with the prospect of falling to a large minimum of 1.1363. A more distant target will be the 1.1336 area, where I recommend fixing the profits. In the case of the growth of the euro and the absence of bears at 1.1444, it is best not to rush with sales. The optimal scenario will be short positions when forming a false breakdown at the monthly maximum of 1.1481. You can sell EUR/USD immediately for a rebound from 1.1514, or even higher - around 1.1562 with the aim of a downward correction of 15-20 points.
The COT report (Commitment of Traders) for February 1 recorded an increase in both long and short positions, and the latter turned out to be slightly more. This led to a slight reduction in the positive delta. However, it should be understood that the data do not take into account the meeting of the European Central Bank, at which its president Christine Lagarde made it clear to all market participants that the regulator will act more aggressively if the observed picture with inflation does not change. As the latest data showed, there is no need to wait for a slowdown in inflationary pressure. This is a strong bullish signal to buy the euro at the moment, as there is a real prospect of a tighter monetary policy and an increase in interest rates in the eurozone this year. On the other hand, we should not forget about the increase in interest rates by the Federal Reserve System already in March of this year, which will be some deterrent for buyers of EUR/USD. Some traders expect that the central bank may resort to more aggressive actions and raise rates by 0.5% at once, rather than by 0.25% - this will become a kind of bullish signal for the US dollar. The COT report indicates that long non-profit positions rose from the level of 213,408 to the level of 213,563, while short non-profit positions jumped from the level of 181,848 to the level of 183,847. This suggests that traders continue to build up long positions, and the future report will indicate a serious advantage in the direction of buyers, as it will take into account the February results of the ECB meeting. At the end of the week, the total non-commercial net position decreased slightly and amounted to 29,716 against 31,569. The weekly closing price also dropped and amounted to 1.1229 against 1.1323 a week earlier.
Signals of indicators:
Moving averages
Trading is conducted slightly above 30 and 50 daily moving averages, which so far indicates the bullish nature 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
In the case of a decline, the lower limit of the indicator around 1.1403 will act as support.
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.
