FX.co ★ EUR/USD: plan for the US session on July 27 (analysis of morning deals).

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to several support levels in the area of 1.1797 and 1.1780. Let's look at the 5-minute chart and talk about what happened. The European currency quickly fell below the support of 1.1797, which led to a larger sale in the area of 1.1780. Several false breakouts were formed from this level in the first half of the day, which led to the formation of signals for opening long positions. For the second half of the day, the technical picture has partially changed.

As long as the trade is conducted above 1.1780, the demand for the euro will remain. The key task of the bulls for the American session will be a breakthrough and consolidation above the resistance of 1.1791, above which the moving averages are playing on the sellers' side. Only the top-down test of 1.1791, together with weak data on the US consumer confidence indicator, will lead to the formation of a signal to open long positions to an upward correction to the resistance area of 1.1811, where I recommend fixing the profits. Going beyond this range will open a direct path for EUR/USD to the maximum of 1.1831. A more distant target will be the area of 1.1849. If the pressure on the euro continues in the second half of the day, it is best to postpone purchases until a false breakdown is formed in the support area of 1.1771. If the bulls do not show activity, I advise you to look at long positions for a rebound from the lower border of the side channel in the area of 1.1753, counting on an upward correction of 10-15 points within the day.

To open short positions on EURUSD, you need:

Sellers have coped with the task set for them, and now the level of 1.1771 is under their sights. A breakdown and a test of this area from the bottom up, together with strong data on the US consumer confidence indicator, will form an excellent entry point into short positions, counting on the continuation of the fall of EUR/USD to the lower border of the side channel 1.1753, where I advise you to take profit. A breakdown of this area will also return the pair to a downward trend, which will quickly push EUR/USD to new lows: 1.1737 and 1.1715. If EUR/USD rises during the US session, the sellers' focus will shift to protecting the resistance at 1.1791. It is best to open short positions only when a false breakdown is formed. In the absence of bear activity and weak fundamental statistics on the US economy, I advise you to postpone sales until the test of a larger resistance of 1.1811. You can open short positions only after the formation of a false breakdown. It is best to sell the pair immediately for a rebound based on a downward correction of 15-20 points only from the maximum of 1.1831.

In the COT report (Commitment of Traders) for July 20, the market continued to be skewed towards sellers of risky assets. Long positions decreased, and short positions increased, which led to another reduction in the overall positive net position. The meeting of the European Central Bank last week undermined the mood of euro buyers. It became clear to everyone that the regulator will not rush to tighten monetary policy and maintain the program of emergency bond purchases for as long as possible to stimulate inflationary growth to achieve its new goal of 2.0%. In the US, the situation is the opposite. Inflation has long gone beyond the target value, and many representatives of the Federal Reserve point to the need to abandon ultra-soft measures to stimulate the economy in the near future, which plays on the side of the US dollar. And no matter how the US central bank tries to convince investors that this is just a temporary phenomenon, the market continues to abandon risky assets favoring safe-haven assets, which is the US dollar. This week, we will publish the FOMC decision on the main interest rate, which may strengthen the position of the US dollar if the management seriously considers the issue of reducing the bond purchase program in the fall of this year. But the lower the euro falls, the higher the demand for it will be in the medium term since the attractiveness of risky assets will not go anywhere. The COT report indicates that long non-commercial positions decreased from 212 851 to the level of 208 669, while short non-commercial positions increased from the level of 153,138 to 162 847. In addition to the decision of the Federal Reserve System at the end of the week, we are waiting for data on changes in the volume of US GDP for the 2nd quarter of this year, where growth is expected to increase by 8.4% immediately. It can also become a powerful bullish impulse for the US dollar. The total non-commercial net position decreased from the level of 59,713 to the level of 45,822. The weekly closing price fell from the level of 1.1862 to 1.1791.

Signals of indicators:

Moving averages

Trading is conducted just below 30 and 50 daily moving averages, which indicates the sideways nature of the market.

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

If the pair grows, the upper limit of the indicator in the area of 1.1820 will act as a resistance.

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 specific 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.