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To open long positions on EURUSD, you need to:
In my morning review, I paid attention to the levels of 1.1939 and 1.1877 and recommended that they decide on entering the market. Unfortunately, the bulls did not manage to reach the area of 1.1939 before the active sell-off of the European currency began. The bears also fell short of the support of 1.1877, which will be emphasized in the second half of the day. Considering that none of the indicated levels were tested, I had to stay out of the market.
For the second half of the day, nothing much has changed, except for the fact that the bulls now have to defend the support of 1.1877, and not think about how to break above the resistance of 1.1939. Only the formation of a false breakout in the area of 1.1877 will lead to the formation of a signal to open long positions in the euro. This scenario may work during a speech by representatives of the Federal Reserve System, or the release of weak fundamental statistics on the American economy. The next major level is seen in the area of 1.1835 from which you can buy the euro immediately on the rebound in the expectation of an upward correction of 20-25 points within the day. If the bulls still cope with the task and manage to protect the support of 1.1877: in this case, we can expect a return of EUR/USD to the opening area of the day to the maximum of 1.1939, where I recommend taking the profits. Only after a break and a top-down test of the level of 1.1939, buyers will completely seize the initiative, which will open a direct road to the area of last week's maximum of 1.1987, where I recommend fixing the profits.
To open short positions on EURUSD, you need to:
The bears coped with the morning task and did not let the pair go above the resistance of 1.1939, but they also failed to wait for the formation of a false breakout at this level. At the time of writing, the pair is gradually approaching the large support level of 1.1877, which will be the main focus in the second half of the day. A breakout and a test of this area from the bottom up will form a good entry point into short positions already in the expectation of a decline in the area of the minimum of 1.1835, where it will be possible to observe the active actions of buyers. The next major support level is seen in the area of 1.1793, where I recommend taking the profits. If the euro is growing during the US session, it is best to wait for the resistance update at 1.1939, from which you can sell EUR/USD immediately for a rebound in the expectation of a downward correction of 25-30 points within the day. The next major level is visible only in the area of 1.1987.
Let me remind you that the COT report (Commitment of Traders) for March 15 clearly shows how there is a further sharp reduction in long positions, but the growth of those who want to sell the euro is gradually slowing down. Despite this, the market remains on the side of sellers of risky assets, which may lead to further formation of a downward trend. This is confirmed by the chart of the fall of the euro, which we have been watching since the end of February this year. The sharp rise in the yield of ten-year US bonds plays in favor of the US dollar, as investors expect that the United States will be the first to start raising interest rates, which makes the dollar more attractive. The recent meeting of the Federal Reserve once again convinced investors that the US economy is recovering much faster than expected, which increases the risk of an earlier inflationary jump. At the moment, it is best not to rush into buying euros but to wait for lower prices. Another factor in the medium-term pressure on the euro is the repeated increase in the incidence of coronavirus in the eurozone countries and a weak vaccination program. The problems with the Astrazeneca vaccine do not add confidence to investors who are betting on a more active summer growth rate of the EU economy. Only after the lifting of restrictions and the restoration of the service sector can we expect an improvement in the economic prospects of the eurozone, which will return the medium-term trend to the strengthening of the EUR/USD. The COT report shows that long non-profit positions declined to 195,857 from 207,588, while short non-profit positions only rose from 105,624 to 105,881. As a result, the total non-commercial net position declined for the fifth week in a row to the level of 89,976 from the level of 101,964. The weekly closing price was 1.1926 against 1.1812 a week earlier.
Signals of indicators:
Moving averages
Trading is conducted below 30 and 50 daily moving averages, which indicates the sideways nature of the market since the averages are close to each other.
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
If the pair grows in the second half of the day, the average border of the indicator in the area of 1.1920 will act as a resistance.
Description of indicators
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