To open long positions on EURUSD, you need:
In my morning forecast, I paid attention to the 1.1297 level and recommended making decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened. As a result of the lack of important fundamental statistics, buyers of the European currency again failed to cope with the 13th figure, and the news that on Wednesday Germany recorded the largest number of deaths from COVID-19 since February this year returned pressure on the pair. However, it was not possible to wait for the formation of signals to enter the market, since none of the levels indicated in the morning were tested. The technical picture for the afternoon remains unchanged.
There are no important fundamental statistics in the afternoon, and most likely, market volatility will remain within the side channel. Buyers of risky assets may try to break above 1.1297, but it will be quite problematic to do so. Data on the level of vacancies and labor turnover from the US Bureau of Labor Statistics will not make any impression on the foreign exchange market, so you don't have to wait for movement during the publication of the report. The main goal of buyers will be to regain control over the resistance of 1.1297, around which the pair have been walking in the last few days. Only a breakthrough and, importantly, a consolidation above 1.1297 with a reverse test from top to bottom will give an excellent entry point with the aim of EUR/USD growth in the area of 1.1325. A break in this range, along with weak statistics on the US and hawkish statements by representatives of the European Central Bank, will lead to a larger upward correction to the maximum area of 1.1356, where I recommend fixing the profits. A more distant target will be the 1.1381 level, which will jeopardize the entire bear market observed recently. If the pressure on the euro persists in the afternoon, it is best not to rush into purchases. I advise you to wait for the formation of a false breakdown in the support area of 1.1286, just above which the moving averages are playing on the buyers' side. Only such a scenario will give a good entry point into long positions. In the absence of bull activity at this level, it is best to postpone sales to larger support of 1.1238. I advise buying EUR/USD immediately for a rebound from the minimum of 1.1214, or even lower - around 1.1188 with the aim of an upward correction of 20-25 points within a day.
To open short positions on EURUSD, you need:
The bears coped and did not let the euro above 1.1297. The main task of sellers remains to protect this range, and the formation of a false breakdown there, together with strong statistics on the American economy, will give an excellent entry point into short positions in the hope of maintaining the bearish momentum observed this week. News about a new strain and a serious spike in the incidence in Germany, of course, does not attract buyers of risky assets to the market, so it is quite possible to expect a return of pressure on the EUR/USD pair in the afternoon. An equally important task for sellers is to control the support of 1.1268, which could not be done in the first half of the day – literally, a couple of points were missing before the test of this level. You can act by analogy with yesterday: a breakdown and a bottom-up test of 1.1268 will lead to the formation of a signal to open short positions with the prospect of a decline in the area of 1.1238. A more distant goal will be the support of 1.1214, where I recommend fixing the profits. In the case of euro growth and lack of bear activity at 1.1297, it is better to wait with sales. The optimal scenario will be short positions when forming a false breakdown in the area of 1.1325. It is possible to open short positions immediately for a rebound from the highs of 1.1356 and 1.1381 with the aim of a downward correction of 15-20 points.
The COT report (Commitment of Traders) for November 30 recorded a decrease in both short and long positions. However, the reduction of long positions remained higher, which led to an increase in the negative delta. Last week there were a lot of speeches by the Chairman of the Federal Reserve System Jerome Powell, who in his comments spoke about the expected changes in monetary policy towards its tightening. The reason for this is rather high inflation, which has grown from "temporary" to permanent, which creates many problems for the Central Bank. The second problem was the new strain of the Omicron coronavirus, which will slow down the global economy at the end of this and early next year, which also restrains the demand for risky assets from buyers. Next week we will have a meeting of the Federal Reserve System, at which a decision will be made on the bond purchase program, so demand for the US dollar is expected to remain in the shorter term. The latest November COT report indicated that long non-profit positions declined from the level of 204,214 to the level of 191,048, while short non-profit positions fell from the level of 220,666 to the level of 214,288. At the end of the week, the total non-commercial net position increased and amounted to -23,240 against -16,452. The weekly closing price, on the contrary, rose slightly to 1.1292 against 1.1241.
Signals of indicators:
Moving averages
Trading is conducted above 30 and 50 daily moving averages, which indicates an attempt by the bulls to offer at least something in the current situation.
Note. The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.
Bollinger Bands
In case of growth, the upper limit of the indicator around 1.1305 will act as resistance. In case of a decline, the lower limit of the indicator around 1.1245 will act as support.
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 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 the short and long positions of non-commercial traders.
