To open long positions on EUR/USD, you need:
The EU leaders' summit was extended for another day, and it is likely to be fruitless again, as can be seen from the reaction of the EUR/USD pair, which remains in the side channel for the fourth consecutive trading day. There is also no new positive fundamental data that can push EUR/USD above weekly highs. Buyers can count on forming a false breakout around the middle of the 1.1412 channel today, since you can open long positions in this scenario and expect a breakout of the upper border of 1.1453. Consolidating above 1.1453 will form a new bullish momentum in the euro, capable of continuing the upward trend from June 30 this year, which will open a direct road to the highs of 1.1485 and 1.1514, where I recommend taking profits. If bulls are not active at the level of 1.1412, it is best to postpone long positions until the lower border of the side channel of 1.1371 is updated, since the optimism of euro buyers could decrease due to the failed EU summit. In case the rebound from the level of 1.1371 is weak, the market may completely move to the side of sellers, so it is best to count on new long positions after updating the low of 1.1307.
To open short positions on EUR/USD, you need:
Sellers need to return the pair to the level of 1.1412 today, which they missed last Friday on the expectation of positive results from the meeting of EU leaders. The main task of the bears for the first half of the day is to form a false breakout in the resistance area of 1.1453, which may occur after the release of fundamental data on German producer prices. This will force speculative buyers of the euro to consolidate long positions, which, in turn, will lead to a downward correction to the area of the middle of the 1.1412 channel. Consolidating under this level will also play a fairly important role, as it will be an additional signal to open short positions in the expectation of a return to the support of 1.1371, where I recommend taking profits, since the main struggle for the pair's direction will unfold at the beginning of this week at this level. Consolidating below this range will increase pressure on the euro and lead to a break in the upward trend, which will be an additional signal to sell with the main goal of returning to the level of 1.1307, where I recommend taking profits. If bears are not active at the level of 1.1453, it is best not to rush to sell against the trend, but wait for the update of new highs in the area of 1.1485 and 1.1514, counting on a correction of 30-40 points within the day.
Indicator signals:
Moving averages
Trading is conducted in the area of 30 and 50 moving averages, which indicates the probability of ending the bullish trend and locking the pair in the side channel.
Note: the period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.
Bollinger Bands
Breaking the lower border of the indicator in the area of 1.1412 will cause the euro to fall. Breaking the upper limit of the indicator in the area of 1.1450 will strengthen the demand for the euro.
Description of indicators
- Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
- Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
- The MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period to 26. The 9 period SMA.
- Bollinger Bands (Bollinger Bands). The period 20.
- Non-commercial speculative traders, 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.
