FX.co ★ EUR/USD: plan for the European session on June 25. COT reports. The market is trapped in a horizontal channel. Buyers aim to surpass resistance at 1.1961

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

Despite the release of a number of important fundamental reports both in the first and the second half of the day, yesterday, the pair continued to trade in a narrow horizontal channel. Let's take a look at the 5 minute chart and talk about what happened. Good data on indices in the German business environment did not push the euro to rise in the first half of the day. The report on the number of initial claims for unemployment benefits in America that was released during the US session were also ignored. Considering that the pair did not reach the levels I indicated, there were no entry points to the market yesterday. As of today, the technical picture has only changed by a bit.

The bulls need to work hard to maintain the bullish momentum seen earlier this week. No fundamental reports in the first half of the day and most likely the focus will be on the Euro summit. However, its results are unlikely to seriously affect the single currency's direction, since it is more of a political nature. The bulls' initial task is to form a false breakout in the support area at 1.1920, which will form a signal to open long positions in hopes that EUR/USD grows further to the resistance area of 1.1961, above which it was not possible to go beyond yesterday. A breakthrough and test of this level from top to bottom may create another signal to open long positions in order to restore the pair to the larger resistance of 1.2000, where I recommend taking profits. The next target will be the area of 1.2032. In case the bulls are not active in the 1.1920 area, it is best not to rush into long positions. I recommend waiting for an update of the 1.1884 support. It is possible to buy EUR/USD immediately on a rebound only from the low of 1.1852, counting on an upward correction of 15-20 points within the day.

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

An important task for the bears in the first half of the day is to surpass the support at 1.1920, which they were fighting throughout all trading sessions on Thursday. A disappointing report on the volume of lending in the euro area is unlikely to seriously hit the euro positions, but this may be enough for the bears to break through and test the 1.1914 area from the bottom up, which will create a good signal to open short positions in hopes that EUR/USD falls to the lows of 1.1884 and 1.1852. I recommend taking profit there. If the euro grows during the European session, an equally important task for the bears is to protect the resistance at 1.1961. Forming a false breakout there will be the entry point for short positions in the euro. If the bears are not active there today, then I recommend postponing short positions until the resistance test of 1.2000, where you can immediately sell the pair on a rebound, counting on a downward correction of 15-20 points. The next major selling resistance comes at the 1.2032 high

The Commitment of Traders (COT) report June 15 shows that both short and long positions significantly fell, however, the data does not take into account the Federal Reserve's decision on interest rates, so I do not recommend putting a lot of emphasis on these indicators right now. Let me remind you that last week, the euro went back to falling against the US dollar after the Fed's first hints about an earlier increase in interest rates in 2023. It also suggests that the US central bank may soon begin phasing out its bond buying program, which will further strengthen the dollar on the global stage. Inflation data that was recently released for the US and the eurozone suggests that the European Central Bank will not rush to make changes in its policy yet, which also weakens the euro's position. Most likely, the trend towards strengthening of the US dollar will continue this week. The COT report indicates that long non-commercial positions fell from 232,103 to 210,816, while short non-commercial positions fell from 124,890 to 92,630. It should be understood that the lower the European currency falls, the more interest it will challenge traders, as the eurozone economy is aimed at strong growth in the summer, which will certainly affect the prospects for its recovery after the coronavirus pandemic. The total non-commercial net position rose from 107,213 to 118,186. The weekly closing price declined from 1.2190 to 1.2121.

Indicator signals:

Trading is carried out in the area of 30 and 50 moving averages, which indicates the sideways nature 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

Surpassing the lower border of the indicator in the area of 1.1920 will increase pressure on the euro. A breakthrough of the upper border of the indicator around 1.1955 will lead to a new wave of euro growth.

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.