In my morning forecast, I paid attention to the level of 1.0441 and recommended making decisions on entering the market. Let's look at the 5-minute chart and figure out what happened there. Data on the eurozone and industrial production helped the euro slightly in the first half of the day. The breakout of 1.0441 occurred without a reverse test from top to bottom, so I did not get an entry point into long positions, nor did I get a normal entry point to sell from 1.0480 since this level turned out to be incorrect. In the afternoon, the technical picture changed slightly. And what were the entry points for the pound this morning?
To open long positions on EURUSD, you need:
As I have repeatedly noted, now everything will depend on the decisions taken following the two-day meeting of the open market committee. If the policy of the Federal Reserve System remains within the framework of past forecasts, and the rate is raised by only 0.5%, the euro may continue to correct upwards - especially after going beyond the upper limit of the side channel formed by the results of yesterday. If Fed Chairman Jerome Powell announces more aggressive plans to raise rates in the future, demand for the US dollar will return and most likely we will see an update of monthly lows. All this allows you to build several scenarios for trading in the afternoon. With the option of reducing the pair, the bulls will have to make a lot of effort to protect 1.0453, just below which the moving averages are already playing on their side. Only the formation of a false breakdown there forms a signal to open long positions in the expectation of continued growth and a breakdown of the resistance of 1.0512. A breakout and a top-down test of this range will hit the stop orders of speculative sellers, which will give a signal to enter long positions with the possibility of correction at 1.0559. A more distant target will be the 1.0604 area, where I recommend fixing the profits. If EUR/USD declines in the afternoon and there are no buyers at 1.0453, as well as a more aggressive Fed policy, pressure on the euro will increase. Demolition of buyers' stop orders below this level will push the pair to a monthly low of 1.0403, so the best option for opening long positions there will be a false breakdown. I advise buying EUR/USD immediately for a rebound only from the level of 1.0353, or even lower - around 1.0306 with the aim of an upward correction of 30-35 points within a day.
To open short positions on EURUSD, you need:
Bears in the afternoon can take advantage of good data on the volume of retail sales in the United States in May this year. Their growth will indicate the persistence of inflationary pressure and the need to raise interest rates - a direct signal to buy the US dollar. In case of further growth of the pair, the formation of a false breakdown in the resistance area of 1.0512 forms an excellent signal to open short positions with the prospect of updating the support of 1.0453 formed at the end of the first half of the day. A breakdown and consolidation below this range, as well as a reverse test from the bottom up - all this will lead to an additional sell signal with the demolition of buyers' stop orders and a larger downward movement to the 1.0403 area. A breakthrough and consolidation below 1.0403 will be the collapse of all possible bulls, from where there is a direct road to 1.0353 and 1.0303, where I recommend completely exiting sales. In the event of an upward movement of EUR/USD during the US session against the background of a sharp drop in retail sales in the US, as well as the absence of bears at 1.0512, I advise you to postpone short positions to a more attractive level of 1.0559. The formation of a false breakdown there will be a new starting point for the continuation of the bear market. You can sell EUR/USD immediately on a rebound from the maximum of 1.0604, or even higher - around 1.0640 with the aim of a downward correction of 30-35 points.
The COT report (Commitment of Traders) for June 7 recorded a sharp reduction in both long and short positions. Many traders were rather wary of the meeting of the European Central Bank. For this reason, there was a rejection of active actions in the market. As time has shown, being out of the market was the ideal scenario. The ECB's governing council said last week that it would raise the rate at its next meeting, but even this did not save the euro in the face of the highest inflation in the United States in the last 40 years. Friday's data last week led to a fall in all risky assets, which also hooked the European currency. The further direction of EUR/USD will depend on the decisions taken by the Federal Reserve System on monetary policy and the forecasts made for the coming years. If aggression continues to be seen in the actions of the Central Bank, most likely the euro will sink even more, which will lead to an update of annual lows. The COT report indicates that long non-commercial positions decreased by 6,305 to the level of 230,248, while short non-commercial positions fell by 4,576 to the level of 179,705. Despite the low euro exchange rate, this does not make it particularly attractive. At the end of the week, the total non-commercial net position decreased to 50,543 against 52,272 a week earlier. The weekly closing price dropped to 1.0710 against 1.0742.
- 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 use the futures market for speculative purposes and to 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.
