To open long positions on EURUSD, you need to:

In my morning forecast, I paid attention to the resistance of 1.2243 and recommended that you decide on entering the market from it. Let's look at the 5-minute chart and talk about how we should have acted. A breakout with consolidation above the resistance of 1.2243 and its reverse test from top to bottom formed a good signal for opening long positions in the European currency. However, at the time of writing, there is no particular activity on the part of the bulls, and the movement up from this level was only 15 points.

Good data on the German business environment indicator, as expected, helped the European currency to strengthen its position in the first half of the day and break above the resistance of 1.2243. Until the moment when trading is conducted above this range, you can bet on further strengthening of the pair in the expectation of updating to a new local maximum of 1.2294, where I recommend fixing the profit. We can talk about a breakdown of this range only after the publication of data on the consumer confidence indicator in the United States, and then on the condition that the data will be worse than the forecast of economists. If the pressure on the euro returns, and the bears achieve a return of the pair to the level of 1.2243, then only the formation of a false breakdown in this range will form an additional signal to buy the euro. If the bulls do not show activity in this range, I recommend postponing long positions immediately for a rebound from the support of 1.2205 in the expectation of an upward correction of 15-20 points within the day. There are also moving averages that play on the side of euro buyers.

To open short positions on EURUSD, you need to:

The bears, after missing the resistance of 1.2243, are not yet willing to return to the market. Their main task for the second half of the day is to regain control of this level. A test of this area from the bottom up will lead to the formation of a good entry point in the expectation of a downward correction to the support area of 1.2205, where I recommend taking the profits. A more distant target will be the minimum of 1.2163. However, we are unlikely to reach it today. In the scenario of the euro growth in the second half of the day after the report on the US consumer confidence indicator and housing market indicators, it is best not to rush into short positions: the optimal scenario for selling will be the formation of a false breakout in the resistance area of 1.2294. You can sell EUR/USD immediately for a rebound only from a larger local high in the area of 1.2347, based on a downward correction of 15-20 points within the day.

Let me remind you that the COT report (Commitment of Traders) for May 18 showed an increase in both short and long positions. Last week, everyone was waiting for economic indicators for the eurozone, namely data on inflation and GDP growth rates. The reports coincided with the forecasts of economists, which allowed the euro to maintain an upward potential in the pair. The publication of the minutes of the Federal Reserve meeting led to a sharp decline in risky assets, as there were ghostly hints among the committee members about the curtailment of the central bank's bond-buying program. However, the next day the whole fall was played out. By the end of the week, pressure on the euro returned after statements by the President of the European Central Bank, Christine Lagarde, that it was not yet time to scale back stimulus support in the eurozone. The data that was released over the past week did not worry traders much, as all attention is now focused on the monetary policy of central banks. Only the news that the Fed is seriously going to reduce the volume of bond purchases will lead to a serious increase in the US dollar. Up to this point, with each decline in the pair, the demand for risky assets will return, which will help the euro in the short term to continue to update the monthly highs. The COT report shows that long non-profit positions jumped from the level of 223,387 to the level of 232,330, while short non-profit positions rose from the level of 129,480 to the level of 132,472. This indicates an influx of new buyers in the expectation of continued growth of the euro, but with each update of the maximum, there are more and more willing to sell. The total non-commercial net position increased from the level of 93,907 to the level of 99,858. The weekly closing price also increased from the level of 1.21406 to 1.21564.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates that the euro will continue to grow 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

A break of the upper limit of the indicator in the area of 1.2260 will lead to new growth of the European currency. In the case of a decline in the pair, the lower border of the indicator in the area of 1.2200 will provide support.

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 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 the short and long positions of non-commercial traders.