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

Several market entry signals were generated on Friday afternoon. Let's take a look at a 5-minute chart and figure out the trades. The formation of a false breakout in the 1.1766 area resulted in an excellent entry point for short positions, however, after the pair returned to the 1.1750 area, the pressure on the euro ended, as many were waiting for the speech of Federal Reserve Chairman Jerome Powell. A false breakout at 1.1751 formed an entry point for the long position before the speech began, after which the euro sharply rose to a high of 1.1804.

Today is quite an interesting day from the point of view of European fundamental reports. The bulls can count on the pair's succeeding growth, and good data on inflation in Germany will provide help, which should exceed the forecasts of economists, if we do not see strong numbers, the pressure on the euro will return. An indicator of consumer confidence in the eurozone will also be published, which may support the pair. Against this background, the bulls can only watch the level of 1.1745 and aim to surpass 1.1809. In case the euro falls in the first half of the day, forming a false breakout in the 1.1785 area creates a good signal to open long positions in continuation of the upward trend with the goal of reaching the 1.1745 high. A much more important task is a breakthrough and reverse test from top to bottom of this level, which also creates a buy signal with the aim of retracing to 1.1831, where I recommend taking profits. The next target will be the 1.1856 area, but it will be possible to reach this level only in case we receive a very strong inflationary jump in Germany. If the bulls are not active in the 1.1785 area, and the moving averages playing on their side are just below this level, you can open long positions in EUR/USD immediately for a rebound only from the support of 1.1765, or even lower - from the 1.1747 level, counting on an upward correction of 15-20 points within the day.

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

As the bears did not try to turn the market over to their side last Friday, nothing came of it. The sharp rally during Powell's speech resulted in removing a number of stop orders and the renewal of weekly highs. The initial task of the bears during the European session will be to return under the control of the 1.1785 level, below which the moving averages are. Only a breakthrough and reverse test of this range will return pressure to the pair and generate a signal to sell the euro in order to renew the 1.1765 low. The next target will be the area of 1.1747, but today we can count on such a powerful downward movement only after weak fundamental statistics on Germany and the eurozone. In case EUR/USD grows further during the European session, only a false breakout at the level of 1.1809 can create the first signal to open short positions in hopes of a return of the bear market. In case traders are not active 1.1809, it is best to postpone selling until the test of the larger resistance at 1.1831. I advise to sell the pair immediately on a rebound counting on a downward correction of 15-20 points only from a high like 1.1856.

I recommend that you familiarize yourself with:

The Commitment of Traders (COT) report for August 17 showed that there is a clear increase in traders' interest in the market, since long positions have sharply grown, but short positions have remained practically unchanged, which may indicate that buyers of risky assets are feeling the low. Eurozone GDP and inflation data released last week were in full agreement with economists' forecasts, which is generally not bad, as everything is going according to the expectations and plans of the European Central Bank. The situation towards the bulls changed when the Federal Reserve's minutes was published, where the members of the committee members' views on the future policy were divided - this supported risky assets and caused the pair's downward trend to come to a stop. The lack of benchmarks due to the new strain of the Delta coronavirus and the incomprehensible reaction of the European economy to it in the fall - all this forces the ECB to continue to adhere to a wait-and-see attitude and maintain a stimulating policy at current levels, which limits the pair's upward potential. The COT report indicated that long non-commercial positions rose from 212,809 to 233,529, while short non-commercial positions fell from 178,952 to 175,889. By the end of the week, the total non-commercial net position increased from 33,857 to 57 640. The weekly closing price also rose from 1.1736 and 1.1777.

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the continued growth of 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

In case of growth, the upper border of the indicator in the area of 1.1820 will act as resistance. In case of a decline, the pair will be supported by the lower border of the indicator in the area of 1.1765.

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.