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

Yesterday there were several rather profitable signals to sell the euro both in the first and in the second half of the day, which made it possible to earn some money. Let's take a look at the 5 minute chart and understand the entry points. In the first half of the day everything went exactly according to the scenario, as well as throughout the week: a sharp breakout of local lows, a pause, level renewal and further downward movement. An instant breakthrough of the support at 1.1671 with a reverse test of this level resulted in forming a good signal to open short positions in continuation of the euro's fall in the afternoon. After the decline, the bulls tried to somehow rehabilitate themselves, but a false breakout at 1.1651 convinced the bears to build up short positions, which led to a sell signal and the euro fell by another 50 points.

Today we are waiting for a series of reports on inflation in Germany, the eurozone labor market and the volume of retail sales in France and Italy, which are unlikely to help the euro in any way in the face of tough demand for the US dollar. Political problems in the US are the main reason for the strengthening of the US dollar, as the desire of investors to buy risky assets amid the falling stock market has clearly diminished this week. Today we are waiting for another series of speeches by representatives of the US Federal Reserve, together with Chairman Jerome Powell. Do not forget about the speech of the US Treasury Secretary Janet Yellen, who will try to convince the US Senate of the need to increase the national debt limit. If this does not happen, the euro will continue to be under pressure. An important task in the first half of the day is to protect the support at 1.1592, which was formed at the end of yesterday. Only a false breakout there will result in forming a signal to open long positions in hopes of an upward correction to the resistance area of 1.1619. The breakthrough and test of this level from top to bottom, along with good data for the eurozone, forms a convenient entry point into long positions with the goal of restoring the pair to the 1.1642 area, where the moving averages, playing on the side of the bears, pass. The next target will be the area of 1.1671, where I recommend taking profits. In case the bulls are not active at 1.1592, I advise you to postpone long positions to new lows around 1.1571 and 1.1548. Opening long positions immediately on a rebound is possible only at the new local support at 1.1510, counting on an upward correction of 15-20 points within the day.

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

For the bears, everything goes exactly as they wanted. It is unlikely that anything will seriously change before the vote in the Senate on changing the US national debt limit, and traders will start buying euros without stopping. Most likely, the pressure on the pair will continue to be observed. A breakthrough of the 1.1592 level, which was formed at the end of yesterday, as well as its renewal from the bottom up, will create a new entry point into short positions in order to pull down EUR/USD to a new low like 1.1571. However, before selling, make sure that there is no false breakout at 1.1592, as a very large divergence is forming on the MACD indicator, which can seriously interfere with the bears' plans. A similar breakthrough at 1.1571 will push EUR/USD even lower to the 1.1548 area. The next target will be the 1.1510 low, where I recommend taking profits. We will be able to get to it only in case of the most sad outcome and very weak data on the European economy. If EUR/USD rallies in the first half of the day, the bears will need a bit of effort to defend the resistance at 1.1619. Forming a false breakout on it creates a good entry point for short positions. In case the bears are not active at 1.1619, it is best to postpone short positions until the test of the larger resistance at 1.1642, where the moving averages, playing on the side of the bears, pass. I advise you to open short positions immediately on a rebound in the expectation of a downward correction of 15-20 points only from a new high of 1.1671.

The Commitment of Traders (COT) report for September 21 revealed a sharp increase in short positions and only a slight increase in long positions, which is due to the lack of desire among traders to bet on strengthening risky assets at the beginning of this fall. The prospect of changes in the monetary policy of the Federal Reserve in November this year maintains demand for the US dollar, as many investors expect the start of a reduction in the bond purchase program from the central bank. The fact that inflation in the United States of America is almost out of control by the Fed speaks of possible more aggressive actions by the end of the year, which could seriously affect the sentiment of traders and investors. This week there will be a fairly large number of speeches by both the Fed and Chairman Jerome Powell, which may shed light on how the central bank will act in any given situation. Considering that energy prices continue to fly up, which will certainly affect the producer and consumer price index, specifics from the Fed would certainly not interfere with the markets. The demand for risky assets will remain limited due to the high likelihood of another wave of the spread of the coronavirus, and its new strain Delta. All this will force the European Central Bank to continue to adhere to a wait-and-see attitude and maintain its stimulating policy at current levels, since there are no serious inflationary problems in the eurozone so far. The COT report indicated that long non-commercial positions rose only slightly - from 186,554 to 189,406, while short non-commercial positions jumped quite seriously - from 158,749 to 177,311. At the end of the week, the total non-commercial net position dropped from the level of 27,805 to the level of 12,095. The weekly closing price also dropped to 1.1726 from 1.1809.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates a bear market.

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

If the euro grows, the upper border of the indicator in the area of 1.1642 will act as a resistance.

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.