To open long positions on EUR/USD, you need:
The euro continued to rise at the end of last week and today the bulls are aiming for another major resistance that will fully help them reverse the downward trend that formed after the Federal Reserve's June meeting.
Considering that there are no important fundamental reports in the first half of the day, most likely the bulls will focus their attention on protecting support at 1.1854, but the level of 1.1891 is much more important. The absence of fundamental indicators may result in forming a false breakout in the 1.1854 area, which generates a signal to open long positions in hopes that EUR/USD would further recover to a large resistance at 1.1891. It is possible to count on a breakthrough of this level only after a short pause, which the bulls can take at the beginning of this week. I recommend opening long positions in order to continue growth above 1.1851, after testing this level from top to bottom, which creates another buy signal in hopes that EUR/USD would recover to a new large high like 1.1930. The next target will be the area of 1.1974, where I recommend taking profits. In case the bulls are not active in the 1.1854 area, and the moving averages, playing on the side of the bulls, also pass there, I advise you to wait for the update of the 1.1825 support from where you can buy EUR/USD immediately on a rebound, counting on an upward correction of 15-20 points within the day.
To open short positions on EUR/USD, you need:
The bears are about to miss out on the market. Focus in the first half of the day will be at 1.1854. Consolidating below this range and a test of this area from the bottom up will create a good signal to open short positions in hopes of restoring the bear market in order for the pair to fall to a low like 1.1825. The 1.1793 level will be another target, where I recommend taking profits. It is worth paying attention to the fact that moving averages are passing in the 1.1854 area, and most likely the first test of this level will not allow the bears to break through. If EUR/USD grows in the first half of the day, an equally important task for the bears is to protect the resistance at 1.1891. Forming a false breakout there creates an entry point for short positions. If the bears are not active there, then it is best to postpone selling until the test of the larger resistance at 1.1930, where you can immediately sell the pair on a rebound, counting on a downward correction of 15-20 points. The next major resistance is at the 1.1974 high.
I recommend for review:
There were minor changes in the Commitment of Traders (COT) report for June 29. One could observe a higher increase in short positions and only a slight retracement of long positions. After a series of central bank meetings, the market is gradually recovering, however, buyers of risky assets are not ready to act, as they fear changes in the Federal Reserve's monetary policy. The fact that the US labor market report indicated a rise in unemployment appears to have cooled the urge to buy the US dollar in the short term, which has hurt the EUR/USD downward trend that we have seen recently. This suggests that until the fall of this year, the central bank is unlikely to resort to changing the bond purchase program, which will negatively affect the prospects for the US dollar in the summer. Traders have no desire to buy the euro either, since no one expects such measures from the European Central Bank either. Apparently this week the pair will spend most of its time in a horizontal channel with the prospect of a slight weakening of the US dollar. The COT report indicated that long non-commercial positions rose from 207,863 to 209,058, while short non-commercial positions rose from 118,806 to 121,912. Good data on the European economy this week could revive the bulls, so everyone expects the eurozone economy to show strong growth in the summer. This is the key to a medium-term upward trend in the European currency. The total non-commercial net position decreased from 89,057 to 87,146. The weekly closing price increased from 1.1.1912 to 1.1928.
Indicator signals:
Trading is carried out above 30 and 50 moving averages, which indicates an attempt by the bulls to regain control of the market.
Moving averages
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 daily D1 chart.
Bollinger Bands
A breakthrough of the upper border of the indicator around 1.1881 will lead to a new wave of euro growth. Surpassing the lower border of the indicator in the area of 1.1860 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. 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.
