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To open long positions on EURUSD, you need to:
In my morning review, I paid attention to the level of 1.1760 and recommended actions based on it. The chart clearly shows how the bears achieve a breakout of this range without any problems, after which there is a small upward correction to this level. Unfortunately, it was not possible to wait for the test of 1.1760 from the bottom up, as after a slight increase in pressure on the euro, it immediately returned, which led to another sell-off of the pair. I missed the signal to open short positions due to the lack of a reverse test from the bottom up of the level of 1.1760. In the second half of the day, the technical picture changed slightly, although the market remains on the side of the sellers of the euro.
The data on the eurozone did not surprise anyone, so the bulls do not have much to count on. Their main task for the second half of the day will be to return to the control of the resistance of 1.1753. Only fixing and testing this area from top to bottom will form a good signal to open long positions in the expectation of an upward correction of the pair during the US session. The main target of the bulls will be a maximum of 1.1796, which is unlikely to get beyond today. For this reason, it is there that I recommend fixing the profit. If the pressure on EUR/USD continues in the second half of the day, and the data on the consumer confidence indicator turns out to be better than economists' forecasts – it is best to postpone long positions until a false breakout is formed in the support area of 1.1714. It is best to open long positions immediately for a rebound against the downward trend from a larger low of 1.1682 with the aim of an upward correction of 20-25 points within the day. The next support area is seen around 1.1643.
To open short positions on EURUSD, you need to:
The bears coped with the morning task and achieved a breakdown of the support of 1.1760. Now, this level has changed slightly and passes in the area of 1.1753. It will be the main focus in the afternoon. In the case of an upward correction of the euro: the formation of a false breakout at the level of 1.1753 forms an excellent entry point into short positions in the continuation of the bear market with the prospect of reaching the minimum of 1.1714, where I recommend taking the profits. An important task for the bears will be to break through and consolidate below this range: a test of this level from the bottom up will form an additional point for selling the euro already in the expectation of updating the minimum of 1.1682, where it will be possible to observe a small rebound of the pair up. In the case of EUR/USD growth and the absence of bear activity at the level of 1.1753, it is best to postpone sales until the test of a large resistance of 1.1796, from which you can try to catch a rebound of 15-20 points within the day.
Let me remind you that in the COT report (Commitment of Traders) for March 23, the indicators of long and short positions practically did not change, which indicates a clear lack of those who want to buy euros in the short term. The delta's rise was due to a slight decline in short positions, rather than an influx of new buyers. Traders' attention is now focused on the problems with the EU vaccination program and the red tape in the implementation of the recovery fund – they will be the main reason for the weak growth of the eurozone economy after the COVID-19 pandemic this year, making it more lagging compared to other developed countries. This is also reflected in the exchange rate of the European currency, which continues to lose its position against the US dollar. For this reason, the market remains on the side of sellers of risky assets, which can lead to further formation of a downward trend. In the event of another round of growth in the yield of ten-year US bonds, the position of the US dollar will only strengthen. Investors expect the United States to be the first to start raising interest rates, which makes the dollar more attractive. 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 fact that many European countries are in a state of quarantine due to the coronavirus. The recent curtailment of social distancing measures has led to new outbreaks of disease among the population, forcing many governments to revert to previous measures. 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 fell to 195,500 from 195,857, while short non-profit positions fell even further from 105,881 to 102,178. As a result, the total non-commercial net position broke its five-week downtrend and rose slightly to the level of 93,332 from the level of 89,976. The weekly closing price was 1.1932 against 1.1926 a week earlier.
Signals of indicators:
Moving averages
Trading is below 30 and 50 daily moving averages, which indicates that the euro will continue to decline in the short term.
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 euro rises, the upper limit of the indicator in the area of 1.1785 will act as a resistance.
Description of indicators
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