In my morning forecast, I paid attention to the 1.0549 level and recommended that decisions on entering the market be made from it. Let's look at the 5-minute chart and figure out what happened there. Against the background of the lack of data, euro buyers proved themselves, achieving a breakdown of 1.0549. However, I did not wait for a normal consolidation with a reverse test of this level from top to bottom. For this reason, it was not possible to log in to my purchases. We also fell short of the nearest resistance around 1.0599. From a technical point of view, the technical picture has undergone only minor changes. And what were the entry points for the pound?
To open long positions on EURUSD, you need:
In the afternoon, Loretta Maester, a representative of the Federal Reserve System, who is known for her hawkish sentiments regarding monetary policy, speaks. She will support the statements made last week by Federal Reserve Chairman Jerome Powell, which may help the dollar regain its position. Before that, data on the index of national activity of the Federal Reserve Bank of Chicago and home sales in the secondary market of the United States will be published. For sure, weaker reports than economists expect will put pressure on the dollar. Therefore, the bulls have every chance to defend the nearest support of 1.0537, which I advise you to focus on during the American session. In the event of a decline in the euro, the key task will be to form a false breakdown there, which will form a signal to open long positions in the expectation of further growth and updating daily highs with the prospect of reaching 1.0599. A breakout and a top-down test of this range will hit sellers' stop orders, which will give a signal to enter long positions with the possibility of building a larger upward trend and updating the maximum of 1.0640, where I recommend fixing the profits. With the option of a decline in EUR/USD and the absence of buyers at 1.0537, and just there are moving averages playing on the side of the bulls, the pair may return to the side channel. This will lead to new problems for buyers. In this case, I advise you not to rush into the market: the best option for opening long positions will be a false breakdown in the support area of 1.0494. I advise buying EUR/USD immediately for a rebound only from the level of 1.0447, or even lower – around 1.0388 with the aim of an upward correction of 30-35 points within a day.
To open short positions on EURUSD, you need:
Sellers have not managed to prove themselves today, but they have kept the chances of returning the market under their control. In case of further growth of EUR/USD in the afternoon after the publication of US data, only the formation of a false breakdown near last week's maximum of 1.0599 forms a signal to open short positions with the prospect of returning to the new support of 1.0537 formed at the end of the first half of the day. A lot depends on this level: if the bulls manage to hold it, there you can safely draw the lower boundary of the new ascending channel, which opens up good prospects for further growth of the euro. A breakdown and consolidation below this range together with strong US data, 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 movement of the pair down to the 1.0494 area. A breakthrough and consolidation below 1.0494 is a direct road to 1.0447, where I recommend completely exiting sales. In case of an upward movement of EUR/USD during the American session, as well as the absence of bears at 1.0599, I advise you to postpone short positions to a more attractive level of 1.0640. In the formation of a false breakdown, there will be a new starting point for the downward correction of the pair. You can sell EUR/USD immediately on a rebound from the maximum of 1.0663, or even higher – around 1.0687 with the aim of a downward correction of 30-35 points.
The COT report (Commitment of Traders) for June 14 recorded a sharp reduction in long positions and an increase in short positions, which led to the formation of a negative delta, indicating the formation of bearish sentiment. The meeting of the European Central Bank remained in the past, and all the emphasis was placed on the decision of the Federal Reserve System, which raised interest rates immediately by 0.75%, declaring the continuation of a tough fight against inflation in the United States. The fact that the authorities continue to pursue a tight monetary policy forces traders to get rid of risky assets and buy the dollar, which leads to its strengthening. Most likely, this trend will continue, since no one is going to abandon measures to combat inflation through an increase in interest rates yet. The COT report indicates that long non-commercial positions decreased by 23,262, to the level of 206,986, while short non-commercial positions jumped by 33,299, to the level of 213,004. Despite the low euro exchange rate, this does not give him much attractiveness, since traders choose the US dollar. At the end of the week, the total non-commercial net position turned negative and decreased from 50,543 to -6,018. The weekly closing price dropped to 1.0481 against 1.0710.
- 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.
