To open long positions on EUR/USD, you need:
The euro continued to strengthen its position, having picked up to weekly highs, amid the lack of important fundamental statistics and several unsuccessful attempts by the bears to regain the level of 1.1267, the breakout of which is only a matter of time. There were several signals to enter the market yesterday. If you look at the 5-minute chart, you will see how several false breakouts, one of them I paid attention to in the forecast for the second half of the day, led to forming a good signal to buy the euro. The breakout of the resistance of 1.1305 passed without problems and the growth stopped in the area of 1.1345, from where I recommended opening short positions immediately on the rebound, which happened. At the moment, the bulls are focused on the breakout of the resistance of 1.1345, consolidating on which will be an excellent signal to buy the euro in the expectation of continuing the bull market and updating the new highs of 1.1381 and 1.1418, where I recommend taking profits. In the scenario of a decline in EUR/USD in the first half of the day, and since we don't expect important fundamental data today, it is best to look at purchases after updating the support of 1.1305 and form a false breakout there. There are also moving averages, which is an additional level of support. If there is no bull activity at this level, you can buy the euro immediately for a rebound from the low of 1.1267, counting on a correction of 25-30 points. Let me remind you that the Commitment of Traders (COT) reports for June 30 recorded an increase in short positions and a sharp reduction in long ones. This indicates that market participants are taking a more cautious approach to the euro last week, as well as the lack of willingness to buy the single currency when it grows at higher prices. The report shows an increase in short non-commercial positions from the level of 72,368 to the level of 81,432, while long non-commercial positions decreased from the level of 190,816 to the level of 180,387. As a result, the positive non-commercial net position decreased to 98,955, against 118,448, which indicates a slowdown in the growth of interest in purchasing risky assets at current prices. Therefore, if there is no rapid growth above the weekly highs, it is better not to rush to open long positions, but wait for a downward correction.
To open short positions on EUR/USD, you need:
Sellers are not very happy with what is happening in the market. The primary task for today is to keep the 1.1345 resistance, its breakout will cause the euro to rapidly grow against the background of the demolition of a number of stop orders of bears. Therefore, forming a false breakout at the level of 1.1345 will be a signal to open short positions. Similarly, you need to act in the case EUR/USD grows to the resistance of 1.1381, but you can sell immediately for a rebound after updating the larger resistance of 1.1418, counting on a correction of 20-25 points against the trend. An equally important task for the bears is to return the euro to the support of 1.1305, since its breakout will push the pair to the lower border of 1.1267, where I recommend taking profits. The Eurogroup will hold a meeting today where Brexit issues will be discussed, but the more important point is that the European Commission will propose a plan to help the eurozone, the approval of which can strengthen the euro's position.
Indicator signals:
Moving averages
Trading is conducted above 30 and 50 moving averages, which indicates the continuation of bullish momentum.
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
If the pair declines, the lower border of the indicator around 1.1275 will provide support.
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.
- MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period to 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.
