To open long positions on EURUSD, you need to:

In my morning forecast, I paid attention to the level of 1.2119 and recommended actions based on it. Let's look at the 5-minute chart and analyze the entry point. It is visible how buyers form a false breakout at the level of 1.2119, which leads to the formation of an entry point into long positions. After rising by 25 points, the euro stopped waiting for the fundamental reports on the euro area, which were the main focus. Unfortunately, the reports completely coincided with economists' forecasts, and the bulls rushed to record profits before the necessary data on inflation in the United States.

From a technical point of view, nothing has changed. However, the position of euro buyers has become more precarious. The bulls need to continue to defend the support of 1.2119, which the pair again came close to in the middle of the European session. The main focus will be on the US consumer price index data. An alarming report will lead to the formation of a false breakout at this level, which will be a signal to open long positions in continuation of the upward trend formed at the end of last week. An equally important target will be the resistance of 1.2149, which the pair fell short of today quite a bit. Only a break and consolidation above this range with a reverse test from top to bottom forms a signal to open new long positions in the expectation of continuing the upward trend already in the area of the maximum of 1.2177, where I recommend taking the profits. The next target will be the level of 1.2235, but its test can only be counted on in the case of very bad reports on the US, not only related to inflation. If the bulls do not show any activity in the area of 1.2119 in the second half of the day, it is best to postpone long positions until the test of larger support of 1.2060 in the expectation of an upward correction of 20-25 points within the day. The next major level is seen in the area of 1.2025.

To open short positions on EURUSD, you need to:

The bears tried in the first half of the day, but nothing came of it. All they can do is continue to fight to continue the downward correction. To do this, they need to take control of the large support level of 1.2119. Only a break and a test of this level from the bottom up on the volume will form a signal to sell the euro to continue the downward trend to the minimum of 1.2060, where I recommend taking profits. Such a scenario can be expected only in the case of very strong fundamental data on US inflation, which will lead to serious pressure on the European currency. A test of the level of 1.2060 will seriously threaten the bullish trend observed at the end of last week and may ultimately turn the market around. If we see a breakout of this range, we can safely expect to update the lows of 1.2025 and 1.1988 by the end of the week. If we again see an upward correction of the pair in the second half of the day, then it is best not to rush with sales: the formation of a false breakdown in the resistance area of 1.2149 forms a new signal to sell the euro to reduce the EUR/USD further. In the absence of bear activity at this level and the sharp growth of the pair after the news, I recommend postponing short positions immediately for a rebound from the large resistance of 1.2177 in the expectation of a downward correction of 15-20 points within the day. The next major level is seen in the area of 1.2235, but this is already a new upward trend, so it is very careful with sales.

Let me remind you that the COT report (Commitment of Traders) for May 4 showed an increase in both short and long positions, but now there were more buyers, which led to an increase in the overall non-commercial position. Last week, everyone was waiting for data on the US labor market and expected the continued growth of risky assets, which happened. Therefore, the growth of long positions outweighed short ones. The poor data once again proves that the Fed will continue to stick to its previous course, even despite the sharp economic jump. This strategy will keep the pressure on the US dollar and will allow us to further increase long positions in risky assets, which will push the EUR/USD up. The COT report shows that long non-profit positions jumped from the level of 200,415 to the level of 206,472, while short non-profit positions rose from 119,448 to the level of 121,643. It indicates an influx of new buyers in the expectation of continued growth of the euro, but with each update of the maximum, there are more and more willing to sell. The more the euro shows growth this month, the stronger the influx of new sellers will be since no one has canceled changes in the Fed's monetary policy this year. The total non-profit net position increased from the level of 80,967 to the level of 84,829. The weekly closing price, on the contrary, fell from the level of 1.20795 to the level of 1.20591.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily moving averages, which creates some difficulties for euro buyers.

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.

Bollinger Bands

A break of the upper limit of the indicator in the area of 1.2165 will lead to a new wave of euro growth. A break of the lower limit of the indicator in the area of 1.2115 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 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.