To open long positions on EUR/USD, you need:
Yesterday, euro buyers continued to bend their line and achieved a breakout of resistance 1.1230, above which I advise you to open long positions. If you look at the 5-minute chart, you will see how, from the second attempt, closer to the middle of the US session, the bulls achieved a breakout of resistance 1.1230 and continued to strengthen the European currency. And even if you decided not to buy the euro without a top-down test, you could wait for it at the Asian session, when there was a sharp drop in the EUR/USD pair, which was temporary. Not surprisingly, the Commitment of Traders (COT) reports for June 16 recorded an increase in long positions, as well as a reduction in short ones, which indicates that the pair has maintained the bullish momentum at that time even with a weekly closing price of 1.1337, as well as customer interest to the market, even amid a lack of good news on helping countries in the eurozone most affected by the pandemic crisis. The report shows a reduction in short non-profit positions from 89,020 to 69,988, while long non-profit positions sharply rose from 184,669 to 187,120. As a result, the positive non-profit net position rose again to 117 132, against 95,639, which indicates an increase in interest in buying risky assets even at current prices high enough for the market. As for the intraday strategy, euro buyers need to try very hard to keep the market under their control. The first goal will be to maintain the area of 1.1230, which we managed to do today at the Asian session. However, it is best to re-open long positions from it only after forming a false breakout there. An equally important task for the bulls will be to break through and consolidate above the resistance of 1.1279, which can be achieved today if good data on activity in the manufacturing sector and the eurozone services are released. Consolidating above 1.1279 will lead to the euro's growth in the area of highs 1.1349 and 1.1418, where I recommend taking profit. In the absence of activity in the support area of 1.1230, where moving averages are also held, it is best to postpone purchases until the week's low is updated in the region of 1.1170, counting on a rebound of 30-40 points within the day. However, a test of this area will indicate a resumption of the bearish trend.
To open short positions on EUR/USD, you need:
Sellers urgently need to rehabilitate themselves and get back the level of 1.1230 as quickly as possible, on which the further direction of the pair depends. If the eurozone reports come out quite mediocre, the bearish actions after the breakout and consolidation below the support of 1.1230 will increase the pressure on the pair, which will lead to a return to the area of 1.1170, where the sellers may already have difficulties, as the bulls will actively protect the week's lows. It will be possible to speak with confidence about the resumption of pressure on the euro and the continuation of the downward correction after a real breakout and consolidation below the range of 1.1170, which was formed on June 10 this year. Sellers will further aim for low of 1.1106, where I recommend taking profits. Also, short positions in euros can be considered after forming a false breakout in the resistance area of 1.1279, which will be an additional signal to sell. If the bulls turn out to be stronger in the first half of the day, then the euro's growth could lead to an update of the high of 1.1349, where I recommend looking at short positions immediately on the rebound while expecting a correction of 30-40 points within the day.
Signals of indicators:
Moving averages
Trading is conducted above 30 and 50 moving averages, which indicates an attempt to return buyers to the euro market.
Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.
Bollinger bands
A break of the upper boundary of the indicator in the region of 1.1295 will lead to a new upward momentum of the pair. In case the euro falls, the lower border of the indicator will provide support around 1.1205 from which you can buy for a rebound.
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 - convergence / divergence of moving averages) 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.
