EUR/USD: plan for the European session on August 19 (analyzing yesterday's trades). Breakthrough of annual highs, new wave

To open long positions on EURUSD, you need:

Yesterday's breakthrough of the resistance at 1.1912, to which buyers of the euro were already getting close, led to a new large wave of the pair's growth. If you look at the 5-minute chart and recall yesterday's review, you will see how euro buyers broke above 1.1912 after an unsuccessful attempt to arrange a downward correction from the 1.1912 level, which resulted in removing stop orders and a powerful bullish momentum to the area of a new high of 1.1963, which they will have to deal with today. However, a more interesting scenario for buying the euro in the first half of the day is forming a false breakout in the support area of 1.1920, where the moving averages are located. Good data on inflation in the eurozone will allow you to form the right entry point into long positions, which will definitely return EUR/USD to the resistance level of 1.1963, which the bulls can take up in the afternoon. If the upward movement already resumes in the European session, then a breakout and settling above 1.1963 will form a good entry point into long positions to continue the bullish trend. The goal will be new highs of 1.1994 and 1.2022, where I recommend taking profits.

Let me remind you that the Commitment of Traders (COT) report for August 11 continued to record the growth of long positions and the reduction of short ones, which tells us about the continued interest of investors in risky assets, even at such high prices, as many bet on a further weakening of the US dollar. Problems are also being added due to disagreements in the US Congress on the further approval of financial assistance to the unemployed, as well as the aggravation of US trade relations with China and the EU. The report shows an increase in long non-commercial positions from the level of 262,109 to the level of 266,078, while short non-commercial positions decreased from 81,461 to 66,327. As a result, the positive non-commercial net position sharply jumped to 199,751, up from 180,648 a week earlier, indicating an increase in interest in buying risky assets.

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

Sellers need to keep the resistance of 1.1963, as there are no other options for them yet. Forming a false breakout there, along with a weak report on inflation in the eurozone, will bring down the aggressive upward potential of the European currency. An unsuccessful breakout and returning to the 1.1963 level will be a signal to open short positions, the first goal of which is the support of 1.1920, where the average moving averages that play on the side of euro buyers are kept. The 1.1884 area will be the long-term goal, where I recommend taking profits. In case EUR/USD grows further according to the trend formed on August 12, it is best to open short positions on a rebound from the resistance of 1.1994 based on a correction of 30-40 points within the day, or sell the pair from the high of 1.2022.

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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the continued growth of the euro.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the D1 daily chart.

Bollinger Bands

A breakout of the upper border of the indicator around 1.1963 may result in the euro's growth. In the event of a decline, support will be provided by the lower border of the indicator in the 1.1890 area, from which you can buy the euro immediately on a rebound.

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.
The material has been provided by InstaForex Company - www.instaforex.com