EUR/USD: plan for the European session on May 4. Bulls will defend support at 1.0936, but it is better not to rush with purchases

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

Buyers of the European currency reached an important level of 1.1000 on Friday after the release of a report on manufacturing activity in the US, which continued to decline at a slower pace than expected. However, it was not possible to hold on to the reached highs, which has already resulted in the euro's sell-off in the Asian session on Monday. Most likely, the pressure on the pair will gradually return, so I recommend looking at long positions only after forming a false breakout at the support level of 1.0936 while expecting a return and an upward correction to the resistance of 1.0973. The breakout of this range depends on the outcome of the reports on business activity in the manufacturing sector of the eurozone countries. If the data turns out to be better than economists' forecasts, it is likely that they will try to regain the resistance of 1.0973 and achieve a test of the high of 1.1013, where I recommend taking profits. In case the pair falls below the 1.0936 level, it is best to return to long positions only on the support test of 1.0895, or buy immediately on the rebound from the low of 1.0852.

To open short positions on EUR/USD you need:

Sellers will be more careful. Most likely, at the beginning of the European session, we will see an unsuccessful attempt to break below the support of 1.0936 and a rebound from this level, after which there will be a small increase in EUR/USD. It is best to return to short positions after forming a false breakout in the resistance area of 1.0973, where larger players will show themselves in the market. If there is no rapid downward movement from this level, I recommend that you stop selling before the resistance test of 1.1013, based on a correction of 25-30 points within the day. An equally important task for sellers will be to consolidate below the support of 1.0936, which will push the pair further to the larger lows of 1.0895 and 1.0852, where I recommend taking profits. If the reports on manufacturing activity and the European Commission's forecast are much worse than economists' projections, most likely the pressure on the euro will only increase at the beginning of the week.


Signals of indicators:

Moving averages

Trading is carried out in the region of 30 and 50 moving average, which indicates the likelihood of the completion of the bull 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

Growth will be limited by the upper level of the indicator at 1.1010. A break of the lower border of the indicator at 1.0935 will increase pressure on the euro.

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
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