EUR/USD: plan for the US session on March 15 (analysis of morning deals). To break above 1.0990, we have broken through, and what's next

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to the level of 1.0990 and recommended making decisions on entering the market. Let's look at the 5-minute chart and figure out what happened. Euro buyers tightened the pair above the 1.0990 level, and a reverse test of this range from top to bottom led to the formation of a buy signal. Unfortunately, there was no major growth of the pair at the time of writing the article. A maximum of 30 points could be seen moving. Until the moment when trading is conducted above 1.0990, we can expect the euro to continue to grow. For the second half of the day, the technical picture has not changed in any way. And what were the entry points for the pound this morning?

The data released at lunchtime on the index of business sentiment from the ZEW Institute of Germany and the eurozone, as well as on the index of the current situation from the ZEW Institute of Germany turned out to be much worse than economists' forecasts. Worse is not even to say anything. The fact that European business and the business environment are in a state of shock is now confirmed by figures that are scary to look at. This will not lead to anything good, respectively, and this is not very good news for the euro. Several US data is coming out this afternoon, which may further affect the market. Also, everyone is waiting for the results of the next meeting of representatives of Russia and Ukraine. Good news and positive results of negotiations can bring back the demand for risky assets, including the European currency. Do not forget about the more aggressive policy of the European Central Bank, which the bank's president Christine Lagarde can tell us about again today - her speech is scheduled for the evening.

An important task of the bulls for the American session will be to protect the support of 1.0990, which acted as resistance in the morning. In the case of a decline in the pair, only a false breakdown at 1.0990 forms the first entry point into long positions in the expectation of continuing growth further to the next resistance of 1.1041. To see a larger upward movement in EUR/USD, active actions and a breakthrough of this range are needed, as well as rather weak data on the US producer price index and the Empire Manufacturing manufacturing index. A top-down test of 1.1041 will give a signal to buy the euro and open up the possibility of recovery to the areas of 1.1104 and 1.1165, where I recommend fixing the profits. If negotiations fail and the conflict worsens, the demand for the US dollar can quickly return. Considering that the recent meeting of the representatives of the two countries did not yield any results, it is not necessary to expect a serious breakthrough from these negotiations either. If there are no bulls at 1.0990, and, as we can see on the chart, there is no particular desire to increase long positions from this level - the optimal scenario for buying will be a false breakdown of the minimum in the area of 1.0934, just above which the moving averages playing on the side of the bulls pass. It is possible to open long positions on the euro immediately for a rebound only from 1.0875 with the aim of an upward correction of 30-35 points within a day.

To open short positions on EURUSD, you need:

The bears did not defend the morning resistance of 1.0990, and now their main goal will be to return this range under their control. As I noted, as long as trading is conducted above 1.0990, euro buyers will have a chance of growth, so a return of EUR/USD back is critically necessary. In case of a decline below 1.0990 and a reverse test from the bottom up, the bears will receive an excellent signal to enter the market, which will lead to a sell signal and the opening of new short positions to reduce to the morning support of 1.0934. The breakdown of this area against the background of strong US data can take place very quickly - this is an additional signal to open short positions already with the prospect of falling to the lows of 1.0875 and 1.0810. The downward movement will be fast since a large number of buyers' stop orders are concentrated at these levels. The farthest target will be the 1.0772 area, where I recommend fixing the profits. However, only news from the Fed, or aggravation of geopolitical tensions and failed negotiations will lead to such a large sell-off. In the case of a rising euro, it is best not to rush into sales. The bulls may start acting more aggressively in the expectation of continuing the correction. Therefore, the optimal scenario will be short positions when forming a false breakdown in the area of 1.1041. You can sell EUR/USD immediately for a rebound from 1.1104, or even higher - around 1.1165 with the aim of a downward correction of 25-30 points.

The COT report (Commitment of Traders) for March 8 recorded an increase in both long and short positions. It is not surprising that against the background of Russia's military special operation on the territory of Ukraine, there were more sellers, which led to a reduction in the positive delta. However, it is surprising that in the conditions of a major fall in the euro, buyers have not capitulated, but continue to actively increase long positions, taking advantage of attractive prices. Last week, a meeting of the European Central Bank was held, where the regulator's policy became clearer. It also adds confidence to buyers of risky assets in the current difficult geopolitical conditions. Let me remind you that Christine Lagarde announced plans to more aggressively curtail measures to support the economy and raise interest rates - a strong bullish medium-term signal for euro buyers. But do not forget that this week we will have a meeting of the Federal Reserve System and how the American regulator will behave in the conditions of the highest inflation in the last 40 years is a big question. We also remember that although Russia and Ukraine have sat down at the negotiating table, so far these meetings do not give any special results. Against this background, I recommend continuing to buy the dollar, since the bearish trend for the EUR/ USD pair has not gone away. The COT report indicates that long non-commercial positions increased from the level of 228,385 to the level of 242,683, while short non-commercial positions increased from the level of 163,446 to 183,839. At the end of the week, the total non-commercial net position decreased to 58,844 against 64,939. The weekly closing price fell from 1.1214 to 1.0866.

Signals of indicators:

Moving averages

Trading is conducted above the 30 and 50 daily moving averages, which indicates active purchases of the euro in the short term.

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 breakthrough of the lower limit of the indicator in the area of 1.0934 will increase pressure on the euro. A breakthrough of the upper limit of the indicator in the area of 1.1010 will lead to a new wave of growth of the pair.

Description of indicators