In my morning forecast, I paid attention to the 1.0916 level and planned to make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened there. The decline occurred, but due to low volatility and the lack of willing market participants to take active action before important US data, it never reached the formation of a false breakdown at this level. For the second half of the day, the technical picture has not been revised, and all levels are relevant.
To open long positions on EURUSD, you need:
We have data on inflation in the United States ahead. If prices fall sharply in February this year, it is obvious that the position of the US dollar will weaken, which will lead to a new wave of euro growth and a resumption of the bullish trend. If inflation in the United States shows growth again, the dollar may regain a significant part of the positions lost recently. I will act according to the morning scenario after the decline and the formation of a false breakdown in the area of the nearest support 1.0916. This will give an entry point to the market with the aim of recovering to 1.0948. A breakout and a top—down update of this range is another chance to buy with a high update around 1.0972. The farthest target will be the 1.0998 area, where I will record profits. With the option of a decrease in EUR/USD and a lack of activity at 1.0916 in the afternoon, as well as strong US data, the chances of a continuation of the downward correction for the pair will increase. In this case, I will try to enter after the formation of a false breakdown in the area of the next support 1.0883. I will open long positions immediately for a rebound from 1.0843 with the aim of an upward correction of 30-35 points within the day.
To open short positions on EURUSD, you need:
Sellers need to actively show themselves in the resistance area of 1.0948, even against the background of weak inflation in the United States. Only protection and the formation of a false breakdown there will be a suitable scenario for opening short positions in the development of a downward correction in order to decrease to the area of 1.0916. After breaking and consolidating below this range, as well as a bottom-up retest, I expect to get another selling entry point with an exit to 1.0883. The ultimate target will be the annual minimum of 1.0843, where I will take a profit. Testing this level will return the downward trend. In the event that the EUR/USD rises during the US session and there are no bears at 1.0948, buyers will aim for a new high at 1.0972 with the aid of falling US inflation. I will only act on a false breakout. I plan to open short positions immediately on the rebound from 1.0998, with the target of a downward correction of 30-35 points.
In the COT report (Commitment of Traders) for March 5, there was a reduction in both long and short positions. The results of the European Central Bank meeting did not surprise traders, nor did the data on the US labor market. Against this background, buyers of risky assets have every chance of continuing to rise. However, much will depend on the market's reaction to inflation data in the Eurozone and the US, which is expected shortly. A decrease in inflation in the US is a direct path for the euro to reach new monthly highs. The COT report indicates that non-commercial long positions fell by 5,209 to the level of 200,025, while non-commercial short positions decreased by 8,666 to the level of 133,714. As a result, the spread between long and short positions increased by 1,920.
Indicator signals:
Moving averages:
Trading is conducted around the 30 and 50-day moving averages, indicating a sideways 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 classic daily moving averages on the daily chart D1.
Bollinger Bands:
In case of a decline, the lower boundary of the indicator at 1.0916 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 – 12 period. Slow EMA – 26 period. SMA – 9.Bollinger Bands (Bollinger Bands). Period – 20.Non-commercial traders – speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting specific requirements.Long non-commercial positions represent the total number of long open positions held by non-commercial traders.Short non-commercial positions represent the total number of short open positions held by non-commercial traders.The total non-commercial net position is the difference between short and long positions of non-commercial traders.