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

Yesterday there were a lot of signals to enter the market, but the second half of the day was more profitable than the first. Let's take a look at the 5 minute charts and understand the entry points.

During the European session, a breakthrough and consolidation of the euro above the resistance of 1.2179 created a signal to open long positions in continuation of the bull market, which rather quickly made it possible for us to get to the level of 1.2208 (+25 points), from where I advised to sell immediately on a rebound. To my regret, the expected downward movement from this level did not occur, and the bears lost this range very quickly, which resulted in losses.

In my afternoon forecast, I advised you to rely on the level 1.2208 and make decisions from it. It can be seen how, when falling into this range, the bulls form a false breakout, which creates good entry points into long positions. The pair rose by around 20-25 points each time.

The euro may continue to strengthen today, but in order to do so, we should be pleased with good fundamental reports. First of all, the focus for the first half of the day will be on the eurozone consumer price index, and it would be nice if it surpassed economists' forecasts. The financial stability report could also increase risk appetite and give new bullish momentum to the EUR/USD pair. Bulls will aim for resistance at 1.2250 during the European session. A breakthrough and test of this area from top to bottom can create a new entry point into long positions in continuation of the upward trend and counting on the renewal of the next monthly high in the area of 1.2294, where I recommend taking profits. However, before rushing to buy EUR/USD above the resistance of 1.2250, it is necessary to exclude the divergence, which can form on the MACD indicator in the morning, which will limit the pair's upward potential. A more optimal scenario for buying will be a downward correction to the support area at 1.2214. Forming a false breakout there will be a good entry point into long positions as we expect the bull market to continue. Moving averages, which play on the side of the bulls, also pass there. Under the scenario of weak data on the eurozone and lack of bulls' activity in the support area of 1.2214: you can safely open short positions from a large low in the area of 1.2179, or even lower - in the area of 1.2141, counting on an upward correction of 15-20 points within the day.

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

The bears will fight to get the market back under control, and it is necessary to protect the large resistance at 1.2250, which bulls are currently aiming for. Forming a false breakout there, along with the divergence on the MACD indicator, creates a new signal to sell the euro in order to fall to the area of yesterday's intermediate support at 1.2214. A breakthrough of this level will pull the pair into a downward correction, which, at least temporarily, will further limit the bull market. An equally important task is to settle below the 1.2214 range. Its renewal from the bottom up will create another signal to sell the euro in order to return to a larger support at 1.2179, where I recommend taking profits. The next target will be the low of 1.2141, but I have no idea what inflation data for the eurozone should be in order for the euro to fall down so quickly. If bears are not active at the level of 1.2250 today this morning, I recommend postponing short positions immediately to a rebound from a large resistance at 1.2294, counting on a downward correction of 15-20 points. The next resistance is only at the new local high in the area of 1.2347.

The Commitment of Traders (COT) report for May 11 revealed that both short and long positions have increased, but this time there were more buyers, which caused the overall non-commercial position to rise. Last week, everyone was waiting for the US inflation report, which set the tone. Its sharp rise only provided temporary support to the US dollar, but traders managed to take advantage of this moment to open long positions after the EUR/USD pair corrected downward. Apparently, news that the Federal Reserve is going to raise interest rates is the only thing that can push the dollar to significantly rise. Until then can the demand for risky assets prevail, which will help the euro in the short term and further renew its monthly highs. The COT report indicated that long non-commercial positions jumped from 206,472 to 223,387, while short non-commercial positions rose from 121,643 to 129,480. This indicates an influx of new buyers that expect the euro's growth, however with each renewal of the highs, there are more and more people willing to sell. The total non-commercial net position rose from 84,829 to 93,907. The weekly closing price also increased significantly from 1.20591 to 1.21406.

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates a new upward trend for the euro.

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

Surpassing the upper border of the indicator in the area of 1.2230 will lead to a new wave of euro growth. Surpassing the lower border of the indicator in the area of 1.2210 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. 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.