EUR/USD: plan for the American session on December 10 (analysis of morning deals)

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to the level of 1.2099 and recommended making a decision from it. If you look at the 5-minute chart, you will see that the unsuccessful attempt of the bulls to break above this range and return to this level formed a good sell signal, which is still working at the moment. Several tests of the level of 1.2099 from the bottom up during the European session were good points for opening short positions. So far, the movement has been no more than 15 points, however, this is enough to move stop orders to this level, especially given the low volatility observed before the publication of the European Central Bank's decision on interest rates.

From a technical point of view, nothing has changed. Everyone is waiting for the results of the meeting of the European regulator, on which the further direction of EUR/USD depends. Buyers of the European currency need to try to regain the position of the market. The initial task remains to break through and consolidate above the resistance of 1.2099. Only a test of this level over and down after the breakdown forms a good signal to open long positions in the expectation of continuing the upward trend, faith in which ends every minute. If the upward trend resumes, the next target will be a return to the resistance of 1.2145, and then a test of last week's high in the area of 1.2177, where I recommend taking the profits. Only a break of 1.2177 will lead to the continuation of EUR/USD growth to the area of highs of 1.2255 and 1.2339. However, this will happen in the future, however, it will only happen if the European Central Bank does not make serious changes to monetary policy at its meeting. If the euro declines in the second half of the day, only the formation of a false breakout in the support area of 1.2046 will be a signal to open long positions. I recommend buying the pair immediately for a rebound only from the level of 1.1986, based on a correction of 20-25 points within the day. A test of this low will lead to a reversal of the uptrend in the short term.

To open short positions on EURUSD, you need to:

At the moment, sellers of the pound are focused on protecting the level of 1.2099, and as long as trading is conducted below this range, the pressure on the euro will remain. The next formation of a false breakout at this level after the publication of the decision of the European Central Bank will be a signal to open short positions in the continuation of the downward correction to the area of the minimum of 1.2046, below which it was not possible to break yesterday. Fixing this range with a test of it from the bottom up will be a good signal to sell EUR/USD already in the area of new weekly lows of 1.1986 and 1.1923, which will completely cancel out buyers' hopes for a continuation of the bull market by the end of this year. However, such a large fall in the euro will occur only if the European Central Bank goes beyond the expectations of investors and expands the bond purchase program much more. Also, we should not exclude hints from the President of the European Central Bank about the option of introducing negative interest rates in the Eurozone next year to stabilize inflationary pressure, which is seriously suffering due to the sharp growth of the euro. If EUR/USD rises above the resistance of 1.2099, it is better not to rush into sales. In this scenario, you can only count on short positions from the level of 1.2145 or sell EUR/USD from the new maximum in the area of 1.2177 with the aim of a downward correction of 15-20 points within the day.

Let me remind you that the COT report (Commitment of Traders) for December 1 recorded an increase in long and a reduction in short positions. Buyers of risky assets believe in the continuation of the bull market, and in the further growth of the euro after breaking the psychological mark in the area of the 20th figure. For example, long non-profit positions rose from 206,354 to 207,302, while short non-profit positions fell to 67,407 from 68,104. The total non-profit net position rose to 139,894 from 138,250 a week earlier. It is worth paying attention to the growth of the delta, observed for the second week in a row, after its 8-week decline, which indicates a clear advantage for buyers and a possible resumption of the medium-term upward trend for the euro. It will be possible to talk about a larger recovery only after European leaders agree with the UK on a new trade agreement. However, we did not get any good news last week, and we have an EU summit ahead of us, which will put the final point in this story. The euro will be supported by news about the lifting of restrictive measures for the Christmas holidays, as well as the absence of major changes in the monetary policy of the European Central Bank.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily moving averages, which indicates the sideways nature of the market.

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 the classic daily moving averages on the daily chart D1.

Bollinger Bands

A break in the lower limit of the indicator around 1.2065 will lead to a larger decline in the pound. A break of the upper limit of the indicator in the area of 1.2110 will lead to an upward trend of the pair.

Description of indicators