To open long positions on EUR/USD, you need:
Data in the afternoon on consumer confidence in the US led to a sharp increase in the euro, which indicates the willingness of investors to take risks, if only there was a reason for this, because lately, there has been less and less good news. If you look at the 5-minute chart and remember my forecast yesterday, you will see how the bulls once again formed a false breakout in the support area of 1.1197 and began to push the pair up at the beginning of the US trading, which led to a sharp increase in the euro above the resistance of 1.1236, however it was not possible to achieve a larger upward trend. At the moment, the buyers' task is to return the resistance of 1.1241 to themselves and consolidate on it, which will be a signal to open long positions in the hope of continuing to strengthen the pair to the week's high in the area of 1.1286, where I recommend taking profits. Further upward correction will entirely depend on data on production activity in the eurozone countries and only a breakthrough of the level of 1.1286 will form an upward trend in EUR/USD, capable of updating the highs of 1.1325 and 1.1381 by the end of the week. If the pressure on the euro continues in the morning, it is best to wait for the next decline and a false breakout to form in the weekly low of 1.1193. If there is no activity there, I advise postponing long positions until the test of the area of 1.1155, or even better, buy EUR/USD immediately to rebound from a low of 1.1106, counting on a correction of 25-30 points within the day, since these transactions will go against the trend. Let me remind you that there are some changes that could affect the growth prospects of the European currency in the Commitment of Traders (COT) reports for June 23. The growth of long positions was recorded a week earlier, but the growth of short ones was also noted, which indicates a possible slowdown of the bullish momentum in the short term. The report shows an increase in short non-commercial positions from 69,988 to 72,368, while long non-commercial positions also slightly increased from 187,120 to 190,816. As a result, the positive non-commercial net position grew again and reached 118,448, against 117,132, which indicates a slight slowdown in the growth of interest in purchases of risky assets at current prices.
To open short positions on EUR/USD, you need:
Euro sellers will wait for weak data on manufacturing activity in Germany and the eurozone and return to the market only after forming a false breakout in the resistance zone of 1.1241, which is a kind of middle of this week's side channel. Such a scenario will cause EUR/USD to fall towards the low of 1.1193, the next test of which will increase the pressure on the euro and bring the pair to the lows of 1.1155 and 1.1106, where I recommend taking profits. If the bears are not active in the 1.1241 area, it is best to postpone short positions until the upper border of the channel of 1.1286 is updated, however, larger players will return to the market from a high of 1.1325, a test of which can lead to a downward correction of EUR/USD of 25-30 points within the day.
Signals of indicators:
Moving averages
Trade is carried out in the region of 30 and 50 moving average, which indicates the equal strength of buyers and sellers.
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 lower border of the indicator in the region of 1.1193 will increase pressure on the euro. You can count on an upward correction after a breakout of the upper boundary of the indicator in the region of 1.1250.
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-commercial 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 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.
- The total non-commercial net position is the difference between short and long positions of non-commercial traders.
