EUR/USD: plan for the US session on April 6 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In my morning review, I paid attention to the level of 1.1821 and recommended acting on it. Let's look at the 5-minute chart and analyze all the entry points: it is clear that after the unsuccessful attempt of the bulls to break above the resistance of 1.1821, a signal is formed to open short positions. However, even despite the poor data on the eurozone unemployment rate, which remained unchanged, although it was expected to decline, we did not wait for a major downward movement. The pair hovered in a narrow side channel and continued to trade in the resistance area of 1.1821.

In this regard, from a technical point of view, nothing has changed, and the strategy remains similar to the morning one. A break and consolidation above the resistance of 1.1821 with its reverse test from top to bottom form a signal to open long positions with the aim of growth to the maximum of 1.1856, where I recommend taking the profit. The next major resistance is seen around 1.1893. Important reports on the US economy are not released this afternoon, so trade may remain in a side-channel until the publication of the results of the meeting of the International Monetary Fund and the G7 countries. If yesterday's upward movement of the euro is not supported by new buyers in the second half of the day, and the pair still shows a decline – it is best not to rush into purchases, but to wait for the formation of a false breakdown in the support area of 1.1779, from where you can open long positions. Just above this level, there are also moving averages that play on the side of euro buyers. If there is no bull activity in the area of 1.1779, I recommend postponing long positions until the support test of 1.1740, from where you can buy the pair immediately for a rebound in the expectation of an upward correction of 20-25 points within the day.

To open short positions on EURUSD, you need to:

The bears have managed their morning task, and as long as the trade is conducted below the resistance of 1.1821, the pressure on the euro will continue. The next formation of a false breakout at this level in the second half of the day forms an additional signal to open short positions to return to the support area of 1.1779. For this range, a more serious struggle will begin, as it will be decisive in the further growth of the euro. A break and consolidation below this range with a reverse test of this from the bottom up forms a good entry point into short positions to return EUR/USD to the minimum of 1.1740, where I recommend taking the profits. A more distant target will be the support of 1.1715. In the case of growth and lack of activity of sellers in the area of 1.1821, it is best to postpone short positions until the update of a larger maximum of 1.1856, from where you can open short positions immediately for a rebound in the expectation of a downward correction of 15-20 points within the day.

Let me remind you that in the COT report (Commitment of Traders) for March 30, the indicators of long and short positions have undergone several changes – short positions have grown strongly, which indicates that the market remains under the control of euro sellers. The drop in the delta occurred as a result of a slight decline in long positions and a sharp increase in short positions. European countries continue to be quarantined this spring due to a new strain of coronavirus and a weak vaccination program that was conducted in the winter. This causes serious damage to the economy and there is already talk among experts that the eurozone's GDP may shrink in the 2nd quarter. Bureaucratic delays in the implementation of the EU recovery fund are another reason for the weak growth of the eurozone economy during the COVID-19 pandemic this year. For this reason, in the medium term, the market remains on the side of sellers of risky assets, which may lead to further formation of a downward trend. Investors expect the United States to be the first to start raising interest rates, which makes the dollar more attractive. Only after the lifting of restrictions and the recovery of the services sector in the euro area can we expect an improvement in the economic outlook, which will return the trend to the strengthening of the EUR/USD. The COT report shows that long non-profit positions declined to the level of 194,764 from the level of 195,500 s, while short non-profit positions rose from the level of 102,178 to the level of 121,024. As a result, the total non-profit net position again continued its decline to 73,739 from the level of 93,332 a week earlier. The weekly closing price also fell to 1.1768 against 1.1932 a week earlier.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates an attempt by buyers to build an upward correction.

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

The volatility has decreased significantly, which does not give signals for entering the market.

Description of indicators