I focused on the 1.0707 level in my morning forecast and planned to make market entry decisions from there. Let's look at the 5-minute chart and analyze what happened. There was a decline, but it did not reach the test and formation of a false breakout. For this reason, it was not possible to find suitable entry points. The technical picture for the second half of the day still needs to be revised.
To Open Long Positions on EUR/USD:Data from the Eurozone did not significantly affect the market direction and did not support the euro, as the figures were much worse than economists' forecasts. However, the fact that the euro did not undergo a major sell-off speaks for itself, and the absence of major sellers is surprising. The focus may be on the US session, the data on changes in US retail sales volume, and the figures on changes in industrial production volume and manufacturing production volume. If the figures are better than economists' forecasts, it will again remind us of the likely rise in inflation after two months of decline, which will put pressure back on the euro and strengthen the US dollar. For this reason, buying will be sought only after a decline and the formation of a false breakout around 1.0707, a suitable entry point for long positions aiming to retest the resistance at 1.0743. A breakout and update from the top down of this range will strengthen the pair with a chance to rise to the area of 1.0783. The furthest target will be the maximum of 1.0816, where I will fix the profit. Testing this level will restore balance to the market. If EUR/USD declines and there is no activity around 1.0707 in the second half of the day, buyers will miss the market, and the pressure on the pair will increase significantly, leading to a new euro drop. In this case, I will enter only after forming a false breakout around the next support at 1.0672. I plan to open long positions immediately on a rebound from 1.0642, targeting an upward correction of 30-35 points within the day.To Open Short Positions on EUR/USD:Sellers have shown up, but no major decline has occurred, which could lead to a larger upward correction. Be careful when making new decisions. A false breakout at 1.0743 will be a suitable entry point for short positions, aiming for a further drop to the support at 1.0707. A breakout and consolidation below this range and a reverse test from the bottom up will provide another selling point with movement towards a new low at 1.0672, where I expect to see a more active manifestation of bulls. The furthest target will be the low of 1.0642, where I will fix the profit. In case of an upward movement of EUR/USD in the second half of the day and the absence of bears at 1.0743, buyers will manage to continue the upward correction. In this case, I will delay selling until the next resistance test at 1.0783. I will also sell there, but only after a failed consolidation. I plan to open short positions immediately on a rebound from 1.0816, targeting a downward correction of 30-35 points.
The COT report (Commitment of Traders) for June 11 showed an increase in short positions and a decrease in long ones. The meeting of the Federal Reserve System and the latest economic data on the United States are to blame for everything. The central bank's tough stance on interest rates has led to some change in the balance of power and now it is far from certain that the European currency will be able to regain its upward trend in the near future. Everything points to the best-case scenario of trading within a channel, and we will continue to fall in the worst-case scenario. The ECB's soft policy and the Fed's firm stance will contribute to this. The COT report indicated that long non-commercial positions decreased by 1,260 to 187,697, while short non-commercial positions increased by 22,966 to 144,053. As a result, the spread between long and short positions increased by 2,574.
Indicator Signals:Moving Averages:Trading is conducted around the 30- and 50-day moving averages, indicating a sideways market.Note: The author considers the period and prices of the moving averages on the hourly H1 chart and differs from the general definition of classic daily moving averages on the daily D1 chart.Bollinger Bands In case of a decline, the lower limit of the indicator around 1.0710 will act as support. Description of the indicators
- Moving average (moving average, determines the current trend by smoothing volatility and noise). Period 50. It is marked in yellow on the chart.
- Moving average: Determines the current trend by smoothing volatility and noise. Period 30. Marked in green on the chart.
- MACD Indicator (Moving Average Convergence/Divergence): Fast EMA period 12. Slow EMA period 26. SMA period 9.
- Bollinger Bands: Period 20.
- Non-commercial traders: Speculators, such as individual traders, hedge funds, and large institutions, using the futures market for speculative purposes and meeting 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: The difference between short and long positions of non-commercial traders.
