EUR/USD: plan for the European session on May 12. COT reports. Buyers and sellers are building up their positions. Bears

To open long positions on EUR/USD, you need:

Yesterday, the bears still managed to gain a foothold below the 1.0819 level, which I did not revise, although I did not get a good signal from this range. Today, all attention will be focused on the US inflation data and it is likely that this report will set the direction of the market for this week, so be very careful. The Commitment of Traders (COT) reports for May 5 recorded an increase in both short and long positions, but the Delta continued to decline, which indicates some advantage for sellers of the European currency in the current conditions. Given the macroeconomic statistics that we expect in the near future, the pressure on the euro may continue. The report shows an increase in short non-profit positions from 87,583 to 92,973, while long non-profit positions also rose from 167,264 to 169,272. As a result, the positive non-commercial net position slightly decreased to 76,299, against 79,688, indicating a decrease in interest in purchasing risky assets even at current prices. As for the intraday strategy, the entire focus of buyers today will be shifted to the resistance of 1.0819, consolidating above which will be a good signal to open long positions in the expectation of updating the highs of 1.0873 and 1.0923, especially if the data on the consumer price index in the US will not be as bad as economists expect. If the pressure on the euro continues, then the bulls will have to protect the support of 1.0771. Forming a false breakout there will be a signal to buy EUR/USD. Otherwise, you can search for new long positions after the rebound from the April 24 low of 1.0728, counting on a correction of 30-35 points within the day.

To open short positions on EUR USD you need:

Sellers of the euro will wait for a weak report on US inflation and act when the pair approaches the resistance of 1.0819. Forming a false breakout will result in pulling down EUR/USD and updating the low of 1.0771. However, the longer-term target of sellers is still the area of April 24, 1.0728, as well as a larger support of 1.0636, which will return the euro to this year's lows. If there is no activity on the part of bears at the 1.0819 level, by analogy, as it was yesterday, it is best to abandon short positions in the euro and wait for updates to the more significant levels of 1.0873 and 1.0923, from where you should open short positions immediately for a rebound based on a downward correction of 30-40 points within the day.

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Signals of indicators:

Moving averages

Trading is below 30 and 50 moving averages, which indicates an attempt by the bears to return to the 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 breakthrough of the lower border of the indicator near 1.0794 raised pressure on the European currency. In case of an upward correction, the upper border of the indicator in the area of 1.0825, a breakout of which will cause the pair to sharply grow, will act as resistance.

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.
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