01.09.202113:41 Forex Analysis & Reviews: EUR/USD: plan for the US session on September 1 (analysis of morning deals). Euro buyers continue to count on a breakthrough of 1.1820

To open long positions on EURUSD, you need:

Nothing interesting happened in the first half of the day. Let's look at the 5-minute chart. It is visible how, against the background of low volatility, it was impossible to reach the support and resistance levels I indicated even after the release of several fundamental statistics on the eurozone. Accordingly, there were no signals for entering the market. From a technical point of view, nothing has changed except for active actions at the level of 1.1820, on which the pair's further direction depends. Buyers of the euro can only follow the level of 1.1792 and aim for a breakthrough of 1.1820. In the case of a decline in EUR/USD in the second half of the day, only the formation of a false breakdown in the area of 1.1792 forms an excellent signal to open long positions in the continuation of the upward trend with the key goal of reaching the maximum of 1.1820, which is already being tested by the bulls. An important task remains a breakthrough and a reverse test from top to bottom of this level, which forms a buy signal to restore to yesterday's maximum in the area of 1.1844 – this will cancel out all the bears' plans for a quick downward correction in early September. A more distant target will be the area of 1.1870, where I recommend fixing the profits. It will be possible to reach this level only in the case of very weak reports on the US economy and the labor market, the release of which is expected in the afternoon. In the scenario of the absence of bull activity in the area of 1.1792, it is possible to open long positions in EUR/USD immediately for a rebound only from the support of 1.1769, or even lower – from the level of 1.1747, counting on an upward correction of 15-20 points within the day.

To open short positions on EURUSD, you need:

Nothing has changed for the sellers. However, it is already clear how the bears are trying their best to form a false breakout in the resistance area of 1.1820, leading to the formation of a signal to open short positions. So be very careful. Their next task during the American session will be to return the level of 1.1792 under control. A breakthrough and a reverse test of this range, together with strong indicators from ADP on the US labor market, will return pressure on the pair and form a signal to sell the euro with an update to the minimum of 1.1769. A more distant target will be the area of 1.1747. However, such a powerful downward movement can be counted on today only after the speeches of the Federal Reserve System representatives. In case of further growth of EUR/USD in the second half of the day and lack of activity at 1.1820, it is best to postpone sales until the test of a larger resistance at 1.1844. I advise you to sell the pair immediately for a rebound based on a downward correction of 15-20 points only from the maximum of 1.1870.

The COT report (Commitment of Traders) for August 24 recorded a clear reduction in long positions and only a slight decrease in short ones. All this was before an important speech by the US Federal Reserve System chairman in Jackson Hole. Many traders were afraid that he would announce more active central bank actions to reduce the bond purchase program, so they tried to get rid of risky long positions on the euro. However, this did not happen, and the euro took a course towards the north at the end of the week, updating local highs. However, the demand for such assets is limited due to the lack of benchmarks caused by the relatively high probability of another wave of the spread of coronavirus and its new Delta strain. All this will force the European Central Bank to continue to adhere to a wait-and-see position and maintain a stimulating policy at current levels, limiting the pair's upward potential. The COT report indicates that long non-commercial positions decreased from 233,529 to the level of 194,169, while short non-commercial positions decreased from the level of 175,889 to the level of 169,539. At the end of the week, the total non-commercial net position fell immediately to 24,630 from the level of 57,640. The weekly closing price also fell from 1.1777 to 1.1744.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily moving averages, which indicates market uncertainty with the direction.

Note: The author considers the period and prices of moving averages on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

A break of the lower limit of the indicator in the area of 1.1792 will increase the pressure on the euro and lead to a larger downward correction of the pair. A break of the upper limit of the indicator in the area of 1.1820 will lead to a new wave of growth.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet 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 is the difference between the short and long positions of non-commercial traders.