To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to the level of 1.1413, and also recommended that it make decisions on entering the market. Let's look at the 5-minute chart and figure out what happened. The decline and breakdown of this range did not allow euro buyers to cling to this level, however, it did not reach the serious activity of sellers. I did not wait for the bottom-up update 1.1413 until the moment of writing the article, so I did not receive an entry point into short positions. From a technical point of view, only the nearest support and resistance levels changed in the afternoon - the tactics remained the same. And what were the entry points for the pound this morning?

During the American session, data on the NFIB small business optimism indicator and the US foreign trade balance are released. Most likely, the reports will not have any impact on the foreign exchange market but will affect only the stock market. For this reason, euro buyers have every chance of returning the 1.1419 level under their control. 1.1419 was formed in the first half of the day after the breakout of 1.1413. A more interesting scenario would be buying the pair in case of its decline and the formation of a false breakdown at 1.1388. If the US data turns out to be much better than economists' forecasts, the pair may go down to this level. An equally important task in the afternoon will be to control the middle of the 1.1419 channel, which is higher than the moving averages that play on the side of the bulls. A break of this range and consolidation above, as well as a top-down test of 1.1419, will lead to an additional buy signal and open the possibility of recovery to the area of this month's maximum - 1.1481. However, it is unlikely that the bulls will stop there, so a breakdown of this range will open a direct road to 1.1514 and 1.1562, where I recommend fixing the profits. If the pair declines during the American session and there is no activity at 1.1388, it is best to postpone purchases to 1.1363. However, I advise you to open long positions there when forming a false breakdown. You can buy the euro immediately for a rebound from the 1.1336 level with the aim of an upward correction of 20-25 points within a day.

To open short positions on EURUSD, you need:

Sellers tried to declare themselves again, but nothing came of it - there are a lot of people who want to pick up euros with every good decline. Although it was possible to break below 1.1413, however, it was not possible to offer something more serious under this level. As a result, we are now watching the bulls' attempts to regain control of 1.1419. Reports on the US economy are unlikely to help sellers, so they need to try not to miss 1.1419, since in this case, they will lose the initiative in the afternoon. Strong US data and the formation of a false breakdown at 1.1419 will increase pressure on the pair and form the first entry point into short positions to reduce EUR/USD to the area of 1.1388. A breakdown and a bottom-up test of this range will give an additional signal to open short positions already with the prospect of falling to a large minimum of 1.1363. A more distant target will be the 1.1336 area, where I recommend fixing the profits. In the case of the growth of the euro and the absence of bears at 1.1419, it is best not to rush with sales. The optimal scenario will be short positions when forming a false breakdown at the monthly maximum of 1.1481. You can sell EUR/USD immediately on a rebound from 1.1514, or even higher - around 1.1562 with the aim of a downward correction of 15-20 points.

The COT report (Commitment of Traders) for February 1 recorded an increase in both long and short positions, and the latter turned out to be slightly more. This led to a slight reduction in the positive delta. However, it should be understood that the data do not take into account the meetings of the European Central Bank, at which its president Christine Lagarde made it clear to all market participants that the regulator will act more aggressively if the observed picture with inflation does not change. As the latest data showed, there is no need to wait for a slowdown in inflationary pressure. This is a strong bullish signal to buy the euro at the moment, as there is a real prospect of a tighter monetary policy and an increase in interest rates in the eurozone this year. On the other hand, we should not forget about the increase in interest rates by the Federal Reserve as early as March this year, which will be some deterrent for buyers of EUR/USD. Some traders expect that the Central Bank may resort to more aggressive actions and raise rates by 0.5% at once, rather than by 0.25% - this will become a kind of bullish signal for the US dollar. The COT report indicates that long non-commercial positions rose from the level of 213,408 to the level of 213,563, while short non-commercial positions jumped from the level of 181,848 to the level of 183,847. This suggests that traders continue to build up long positions, and the future report will indicate a serious advantage in the direction of buyers, as it will take into account the February results of the ECB meeting. At the end of the week, the total non-commercial net position decreased slightly and amounted to 29,716 against 31,569. The weekly closing price also dropped to 1.1229 against 1.1323 a week earlier.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily moving averages, which prevents buyers from continuing the growth of the euro.

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 the case of growth, the upper limit of the indicator around 1.1450 will act as resistance. A break of the lower limit in the area of 1.1390 will increase the pressure on the pair.

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.