In my morning forecast, I drew attention to the level of 1.0962 and recommended making entry decisions based on it. Let's look at the 5-minute chart and analyze what happened there. The breakout and reverse test from the bottom to the top of this range allowed for a selling signal, resulting in a pair's fall of more than 30 points. Active defense of support at 1.0929 led to euro purchases, but after a slight correction, pressure on the pair returned, resulting in losses on the deal. The technical picture was revised for the second half of the day.
To open long positions on EUR/USD, the following is required:
Weak data from France and Germany led to a decline in the pair at the beginning of the European session. However, much greater pressure on EUR/USD was exerted by news that inflation in the eurozone slowed to 2.4% from 2.9% in October of this year. Such statistics ended the cycle of interest rate hikes by the European Central Bank, which is bad for the euro. In the second half of the day, equally interesting data on the number of initial claims for unemployment benefits in the United States and the main index of personal consumption expenditure are planned. This indicator may revive demand for the euro, provided that inflation in the United States also decreases more than economists expect. Data on changes in income and spending levels, as well as the speech of FOMC member John Williams, will be of secondary importance. Considering the lack of interest in buying the euro around 1.0935, sellers will likely try to reach new support at 1.0896, where I plan to act. A decline and the formation of a false breakout there will provide an entry point for long positions, counting on the pair's rise and testing the new resistance at 1.0939 formed by the end of today. Its breakout and update from top to bottom will revive demand for the euro, signaling a buy and a chance to update 1.0975, where moving averages, playing on the side of sellers, are located. The ultimate target will be the area of 1.1017, where I will take profits. Bears will try to build a new downtrend in the case of a further decline in EUR/USD and the absence of activity at 1.0896 in the second half of the day. In this case, entering the market will be possible after forming a false breakout around 1.0857. I will open long positions immediately on the rebound from 1.0827, with the target of an upward correction of 30-35 points within the day.
To open short positions on EUR/USD, the following is required:
Sellers are putting the most serious pressure on the euro in recent times. It is necessary to stay below 1.0939 to maintain control over the market. Protecting this range with the formation of a false breakout will provide a selling signal further in the development of the bear market, resulting in a drop in the pair to the area of 1.0896. A breakout and consolidation below this range and a reverse test from bottom to top will lead to another sell signal with an exit at 1.0857. The ultimate target will be a minimum of 1.0827, where I will take profits. In the case of an upward movement of EUR/USD during the American session against the backdrop of a sharp slowdown in inflationary pressure in the United States, as well as dovish statements by Federal Reserve representatives, together with the absence of bears at 1.0939, buyers will return to the market. This will open the way to resistance at 1.0975, formed by the end of today. You can sell there, but only after an unsuccessful consolidation. I will open short positions immediately on the rebound from 1.1017, with the target of a downward correction of 30-35 points.
Indicator signals:
Moving averages
Trading is carried out below the 30 and 50-day moving averages, indicating the advantage of sellers.
Note: The author determines the period and prices of moving averages on the hourly chart H1 and differs from the general definition of classic daily moving averages on the daily chart D1.
Bollinger Bands
In case of a decline, the lower boundary of the indicator at 1.0915 will act as support.
Description of indicators:
• Moving average (MA, determines the current trend by smoothing volatility and noise). Period 50. Marked on the chart in yellow.
• Moving average (MA, determines the current trend by smoothing volatility and noise). Period 30. Marked on the chart in green.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial traders - speculators, such as individual traders, hedge funds, and large institutions, 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.
• The total non-commercial net position is the difference between short and long positions of non-commercial traders.