To open long positions on EURUSD, you need:
in the first half of the day, no signals were generated to enter the market. Low trading volume will continue in the afternoon against the backdrop of Columbus Day, which is celebrated in the United States today.
From a technical point of view, nothing has changed, since none of the levels indicated earlier in the morning were tested. It will be possible to talk about the continued growth of the euro only after a breakout and consolidation above the resistance of 1.1828, which will open a direct road to new highs in the area of 1.1868 and 1.1915, where I recommend fixing the profits. However, we can hardly expect such a strong bullish momentum at the beginning of the week. Now there is pressure on the euro, thus, a more optimal scenario for buying will be a test of the support of 1.1783, where the moving averages that play on the side of buyers also pass. You can open long positions from this level immediately for a rebound in the expectation of continuing the bull market.
To open short positions on EURUSD, you need:
The bears did not manage to prove themselves, as the pair did not test the resistance of 1.1828, which I paid attention to this morning. Only the formation of a false breakout forms a signal to open short positions. The lack of fundamental data in the second half of the day can keep the pressure on the euro and more important to the bears will be a break and consolidation below the support of 1.1783 that forms a new entry point into short positions with the aim of reducing the area of low 1.1737 where I recommend taking the profit. With another rise in the pair in the afternoon and a breakout of the resistance at 1.1828, it is best not to rush to sell against a new upward trend, but wait for the update of the larger resistance at 1.1868, from where you can sell the euro immediately on a rebound, counting on correction of 20-30 points within the day.
Let me remind you that the COT report (Commitment of Traders) for October 6 recorded a reduction in long positions and an increase in short ones, which led to an even greater decrease in the delta. Buyers of risky assets believe in the continuation of the bull market, but prefer to proceed cautiously, as there is no good news on the Eurozone and the pace of economic recovery yet. Thus, long non-commercial positions decreased from the level of 241,967 to the level of 231,369, while short non-commercial positions increased from the level of 53,851 to the level of 57,061. The total non-commercial net position fell to 174,308, compared to 188,116 a week earlier, which indicates a wait-and-see attitude of new players, however, bullish sentiment for the euro remains quite high in the medium term.
Signals of indicators:
Trading is conducted around 30 and 50 daily moving averages, which indicates a return to market equilibrium.
Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of classic daily moving averages on the daily chart D1.
Only a break of the upper limit of the indicator in the area of 1.1830 will lead to a new wave of growth of the European currency.
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.
The material has been provided by InstaForex Company – www.instaforex.com
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