In my morning forecast, I paid attention to the 1.0713 level and planned to make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened there. The decline and the formation of a false breakdown there led to a good entry point for the purchase of the euro, which resulted in an increase in the pair by almost 20 points. In the afternoon, the technical picture was not revised.
To open long positions on EURUSD, you need:
Given the lack of important statistics on the eurozone, buyers took the chance and defended the 1.0713 level. However, it is still very early to say that they have gained any advantage. Ahead we have data on the Fed-Philadelphia manufacturing index, the number of new foundations laid, the volume of construction permits issued and the number of initial applications for unemployment benefits. Strong statistics will be the reason for another sale of the euro and the purchase of the US dollar, so buyers will have to show themselves around 1.0713 again. Only the next formation of a false breakdown there, by analogy with what I discussed above, will be a suitable entry point into long positions in order to update 1.0750 – resistance, above which it has not yet been possible to get out. Just below this level are the moving averages, so breaking and holding above this range will strengthen the pair, with a chance to rise to the 1.0787 area. The furthest target will be the 1.0816 maximum, where I will take profits. Testing this level will give buyers an advantage. If EUR/USD declines and there is no activity around 1.0713 in the second half of the day, pressure on the pair will increase significantly, leading to another euro drop. In this case, I will only enter long positions after forming a false breakout around the next support at 1.0672. I plan to open long positions immediately on a rebound from 1.0642, targeting a 30-35 point upward correction within the day.
For Opening Short Positions on EUR/USD:
Sellers showed themselves quite well, but they still failed to break below 1.0713 on the second attempt. Now, the focus shifts to defending the nearest resistance at 1.0750, from which I plan to act. A false breakout there will be a suitable entry point for short positions, aiming to drop the pair to the 1.0713 support level. Breaking and holding below this range amid strong US statistics, along with a reverse test from bottom to top, will provide another point for selling, targeting a new low of 1.0672, where I expect a more active presence of bulls. The furthest target will be the 1.0642 minimum, where I will take profits. If EUR/USD rises in the second half of the day and there are no bears at 1.0750, buyers will be able to resume building an upward correction. In this case, I will postpone selling until testing the next resistance at 1.0787. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately on a rebound from 1.0816, targeting a 30-35 point downward correction.
In the COT report (Commitment of Traders) for June 11, there was an increase in short positions and a decrease in long positions. This was due to the Federal Reserve meeting and recent US economic data. The central bank's hawkish stance on interest rates has led to some changes in the balance of power, and it's now far from certain that the euro will be able to regain its upward trend anytime soon. Everything indicates that, at best, we will be stuck in a channel, and at worst, we will continue to fall. The ECB's dovish policy and the Fed's hawkish stance will contribute to this. The COT report shows that long non-commercial positions decreased by 1,260 to 187,697, while short non-commercial positions increased by 22,966 to 144,053. As a result, the spread between long and short positions increased by 2,574.
Indicator Signals:
Moving Averages
Trading is conducted below the 30 and 50-day moving averages, indicating an attempt by bears to take over the market.
Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differ from the general definition of classic daily moving averages on the D1 daily chart.
Bollinger Bands
In case of a decline, the lower boundary of the indicator, around 1.0725, will act as support.
Description of Indicators
- Moving Average: Determines the current trend by smoothing volatility and noise. Period 50, marked in yellow on the chart.
- Moving Average: Determines the current trend by smoothing volatility and noise. Period 30, marked in green on the chart.
- MACD Indicator (Moving Average Convergence/Divergence): Fast EMA period 12, Slow EMA period 26, SMA period 9.
- Bollinger Bands: Period 20.
- Non-commercial Traders: Speculators such as individual traders, hedge funds, and large institutions use the futures market for speculative purposes and meeting 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: The difference between short and long positions of non-commercial traders.
