To open long positions on EURUSD, you need to:
In the morning forecast, I paid attention to the level of 1.2122 and recommended to act from it. Let's look at the 5-minute chart and talk about what happened. It can be seen that the bears did not show much activity in the area of 1.2122, which led to its breakdown and consolidation above. However, it was not possible to wait for the reverse test from top to bottom of this level. As a result, the signal was missed.
In the afternoon, buyers will need to defend the support of 1.2122. A decline to this level may occur after the release of fundamental data on the US economy. The formation of a false breakout in this range forms a good signal for continued growth in the area of the maximum of 1.2166, where I recommend taking the profits. In the scenario of no bull activity at this level, it is best to postpone long positions to the level of 1.2082, from where you can buy the euro immediately on the rebound in the expectation of an upward correction of 15-20 points within the day.
To open short positions on EURUSD, you need to:
The bears will rely on the fundamental statistics on the US economy, which may prevent the bulls' plans to break above the resistance of 1.2166. However, I recommend opening short positions only in case of an unsuccessful consolidation above this range with the main goal of returning to the support of 1.2122. An equally important task will be to break through and consolidate under the level of 1.2122, which will push the European currency even lower - to the minimum of 1.2082, where I recommend taking the profits. If the bears do not show any activity in the resistance area of 1.2166 in the afternoon, it is best to postpone selling for a rebound from the resistance of 1.2164 in the expectation of a downward correction of 20-25 points within the day.
Let me remind you that the COT report (Commitment of Traders) for February 9 recorded an increase in short and long positions, which reflects the current situation. The equality of buyers and sellers characterizes the entire past week when the pair spent in a side channel. It is important to note that any adequate decline in the EUR/USD pair has always been accompanied by rapid purchases, and the fact that the US dollar continues to be less in demand among investors has already been repeatedly mentioned. Therefore, I believe that the more correct approach to the market is to buy the European currency. The only problem for the euro remains the lack of guidance from the European Central Bank and the risk of verbal interventions that limit the upward potential. However, with each significant downward correction of the pair, the demand for the euro will only increase. The COT report shows that long non-profit positions rose from the level of 216,887 to 220,943, while short non-profit positions rose from the level of 79,884 to the level of 80,721. As a result, the total non-profit net position increased after last week's decline to the level of 140,222 from the level of 137,003. The weekly closing price was 1.2052 against 1.2067 a week earlier.
Signals of indicators:
Trading is conducted above 30 and 50 daily moving averages, which indicates the continuation of the euro's growth in the short term.
Note: The period and prices of the 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.
In the case of a decline in the pair, the average border of the indicator in the area of 1.2100 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.