EUR/USD: plan for the US session on June 8 (analysis of morning trades)

To open long positions on EURUSD, you need to:

In my morning forecast, I drew attention to the data on the European economy, which put limited pressure on the European currency, as it turned out to be worse than economists' forecasts, which slightly brought buyers of risky assets to their senses. Unfortunately, due to the low volatility, even the nearest support and resistance levels were not updated, making it impossible to get any signals on entering the market. The situation will not change in the second half of the day, as there are no important reports scheduled for the US session. The technical picture remained unchanged.

We did not reach the support of 1.2155. Thus, in the second half of the day, the focus of the bulls will be on it. The formation of a false breakout will form a signal to open long positions, after which buyers will again target the resistance of 1.2201, which they failed to get beyond yesterday. A breakout and a test of this area already from top to bottom on the volume can form an entry point into long positions to continue the upward trend, counting on the next maximum of 1.2225. The next target will be the level of 1.2250, where I recommend fixing the profit. Under the scenario of strong US data and the absence of bull activity in the area of 1.2155, long positions can be safely opened from a large low in the area of 1.2113 or even lower - in the area of 1.2073 in the expectation of an upward correction of 15-20 points within the day. If buyers fail to get out of the resistance of 1.2201 today, trading will continue in the new wide side channel of 1.2123-1.2201.

To open short positions on EURUSD, you need to:

Bears will fight for the return of the market under control. For this, you need to achieve a breakdown of the support of 1.2155. A breakout and a test of this level from the bottom up will form the first signal to open short positions, which will drag the pair into a downward correction, limiting the further bull market for at least a while. Good fundamental data on the small business optimism indicator and the US foreign trade balance can help EUR/USD return to the lower border of the side channel 1.2113, where I recommend taking the profits. The next target will be a minimum of 1.2073. However, such a scenario is unlikely to be possible without serious market shocks. If there is no bear activity today in the second half of the day, the euro can recover to the resistance of 1.2201, from where it is possible to open short positions only if a false breakout is formed. I recommend selling EUR/USD immediately for a rebound only after updating the resistance of 1.2225 or even higher - after testing the maximum of 1.2250 in the expectation of a downward correction of 15-20 points.

Let me remind you that the COT report (Commitment of Traders) for June 1 shows an increase in long positions and a reduction in short ones, indicating an increase in demand for the European currency in the last month of the second quarter this year. It is expected that in the summer, the European economy will show a particularly strong recovery, which will lead to new growth of the European currency in the area of annual highs. The lifting of several quarantine restrictions, which are still in effect in European countries, will lead to an even greater economic recovery. According to the latest data, it will give it a boost through increased retail sales and inflation, which has seriously increased in the euro area. Data on activity in the manufacturing sector and the service sector also continue to please economists, which once again indicates a serious pace of recovery. Traders now perceive any strong movements of the EUR/USD pair downwards as an excellent opportunity to gain long positions in continuing the bull market. The dollar can only hope that the Federal Reserve System will seriously talk about reducing the volume of bond purchases in the summer. However, we will not know about this until mid-June. The COT report shows that long non-profit positions jumped from the level of 236,103 to 237,360, while short non-profit positions fell from the level of 132,103 to 128,038. It indicates an influx of new buyers in the expectation of continued growth of the euro and a wait-and-see attitude on the part of sellers.

Given that the pair had seriously recovered last Friday, this may indicate the formation of a new upward trend and the return of EUR/USD to local highs. It is where the bulls will continue to accumulate long positions with the expectation of going beyond them. It indicates a possible breakdown of the highs of last month in the near future and the continuation of the euro's growth. The total non-commercial net position increased from 104,000 to 109,322. The weekly closing price also increased from 1.22142 to 1.22326.

Moving averages

Trading is conducted in 30 and 50 daily moving averages, which indicates market uncertainty with the further direction.

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 growth will be limited in the area of the upper level of the indicator in the area of 1.2201. A break of the lower limit in the area of 1.2170 will increase the pressure on the pair.

Description of indicators