To open long positions on EURUSD, you need:
Latest statements by the Federal Reserve that it will buy bonds in an unlimited amount affected the quotes of the US dollar, which weakened against the euro in the afternoon, thereby, allowing the bulls to reach the resistance of 1.0826, from which active sales began again (see the 5-minute chart). I paid attention to them in my forecast. In the COT reports (Commitment of Traders) for March 17, a sharp reduction in short positions for the euro was noted, but also a decrease in long positions was recorded, which indicates a fairly cautious attitude of traders to buying euros even amid such a strong fall, which is not even taken into account in this indicator. The reduction in short non-commercial positions occurred from the level of 166,487 immediately to 114,638, while long non-commercial positions also fell from the level of 153,820 to 147,133. As a result, the non-commercial net position turned out to be positive and reached 32,495, which indicates a clear advantage for the bulls. However, as we can see on the chart, reports are released with a one-week delay, and now the situation has changed dramatically. High market volatility in recent years will not allow you to rely on COT reports. However, despite the pressure that is currently being exerted on the euro, the bulls managed to go above the level of 1.0727 yesterday, and have already come close to the resistance of 1.0826, which is their main goal today. A breakout and consolidation above this level will lead to an update of the highs of 1.0884 and 1.0930, where I recommend taking profits. The longer-term goal of the bulls will be the 1.0975 area. In case the euro repeatedly falls in the first half of the day, it is best to return to long positions on a false breakout from the support of 1.0727, or buy immediately on a rebound from the annual low in the area of 1.0636 in the calculation of a rebound of 60-70 points inside the day.
To open short positions on EUR USD you need:
Sellers will still protect the resistance of 1.0826, from which the euro has already fallen to annual lows several times. The formation of a false breakout there will be an additional signal to open short positions. However, much will depend on what reports on manufacturing activity and services in the eurozone will come out. If the data turns out to be far worse than economists' forecasts, bears will quickly return EUR/USD to the support of 1.0727, consolidating below which will pull down the pair to annual lows of 1.0636, where I recommend taking profits. More persistent sellers will wait for the 1.0572 and 1.0549 levels to be updated. If the demand for the euro persists after the breakout of the upper boundary of the side channel of 1.0826, then it is best to postpone sales until the test of the highs 1.0884 and 1.0930, from where you can expect a rebound of 60-70 points inside the day.
Indicator signals:
Moving averages
Trading is conducted just above the 30 and 50 moving averages, which indicates the continuation of the formation of an upward correction in the pair.
Bollinger Bands
A break in the upper limit of the indicator around 1.0826 will strengthen the demand for the euro. If the pair declines, the lower boundary of the indicator around 1.0680 will provide 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 traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
- Long nonprofit positions represent the total long open position of nonprofit traders.
- Short nonprofit positions represent the total short open position of nonprofit traders.
- The total non-profit net position is the difference between short and long positions of non-profit traders.
