EUR/USD: plan for the European session on December 11. COT reports. ECB plans do not restrain euro from rising against dollar

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

In yesterday's afternoon forecast, I mentioned buying from the 1.2099 level, which is what happened. Let's take a look at the 5-minute chart and talk about where you can and should enter the market. The demand for the euro returned following the European Central Bank meeting, as Lagarde did not say anything terrible that could somehow influence the upward trend. Therefore, a breakout and being able to settle above 1.2099, along with testing this level from top to bottom, produced an excellent signal to buy the euro, which quickly materialized at the high of 1.2145. The upward movement was 45 points. I did not wait for sales on a false breakout from 1.2145, since it wasn't updated from the bottom up, after failing to consolidate. I marked all areas on the chart.

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At the moment, I decided to abandon the resistance in the area of the weekly high and moved it to the 1.2202 level, to which the euro is now striving. The main task of the bulls in the first half of the day is to protect support at 1.2145. Forming a false breakout there will be a new signal to open long positions in order to update the high of 1.2202. A breakout and being able to settle at this range will quickly lead the euro to a new target of 1.2255, where I recommend taking profits. In case EUR/USD returns to the area below the support level of 1.2145 in the first half of the day, and weak data on Germany and Italy may contribute to this, then I recommend postponing long positions until the low of 1.2099 has been updated, where the moving averages play on the side of buyers. Or buy EUR/USD immediately on a rebound from the low of 1.2046, counting on an upward correction of 20-30 points within the day.

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

Pound sellers are currently focused on returning the pair to 1.2145, which they missed during the Asian session today. The ECB's recent statement did not bring bearish sentiment back to the market, so today it is necessary to be very careful. Falling below 1.2145 and testing this area from the bottom up produces a good signal to open short positions in hopes to fall to a low of 1.2099. We can only talk about a reversal of the upward trend, which appeared yesterday, after breaking through 1.2099, which will quickly pull down EUR/USD to a low of 1.2046, where I recommend taking profit. In case the euro grows further, I advise returning to short positions only after the resistance test of 1.2202. If bears are not active there, it is best to wait for sales from a new high of 1.2255, from which a larger downward correction by 15-20 points within the day may occur.

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The Commitment of Traders (COT) report for December 1 showed an increase in long positions and a reduction in short positions. Buyers of risky assets believe that the bull market will continue and they also anticipate the euro's growth, after going beyond the psychological mark in the area of the 20th figure. Thus, long non-commercial positions rose from 206,354 to 207,302, while short non-commercial positions fell to 67,407 from 68,104. The total non-commercial net position rose to 139,894 from 138,250 a week earlier. Take note of the delta's growth after its 8-week decline, which indicates a clear advantage of buyers and a possible resumption of the medium-term upward trend for the euro. We can only talk about an even bigger recovery when European leaders have negotiated a new trade deal with Britain. However, we did not receive good news last week, and we have an EU summit ahead of us, which could put the final point in this story. News that restrictive measures will be lifted for the Christmas holidays can provide support to the euro, as well as the absence of major changes in the ECB's monetary policy.

Indicator signals:

Moving averages

Trading is conducted above 30 and 50 moving averages, which indicates the advantage of buyers over sellers.

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

In case of a breakout of the upper border of the indicator in the 1.2155 area, we can expect an increase in demand for the euro. In case the pair falls, support will be provided by the lower border of the indicator in the 1.2080 area.

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) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). 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.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
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