FX.co ★ EUR/USD: plan for the European session on June 29. COT reports. Pressure on the euro is gradually increasing. Bulls did not cope with the tasks assigned

To open long positions on EUR/USD, you need:

The first half of the day was calm enough for the European currency. Low volatility amid an absence of important fundamental reports did not make it possible for the price to get to the nearest support and resistance levels. The afternoon was more interesting. Let's take a look at the 5 minute chart and break down the entry point. False breakout and return to the level of 1.1914 during the US session, and then its reverse test from the bottom up has resulted in creating a signal to open long positions. As a result, the upward movement was about 25 points, after which the volatility and trading volume fell sharply again.

Before talking about further prospects for the EUR/USD movement, let's see what happened in the futures market and how the Commitment of Traders positions have changed. The Commitment of Traders (COT) report June 22 showed significant changes: long positions sharply fell and short positions increased. Such changes took place after the Federal Reserve's meeting on interest rates. Let me remind you that during the last meeting, the central bank made the first hints of an earlier increase in interest rates. Some Fed members expect this kind of change as early as 2022. This suggests that in the near future the central bank may begin to wind down its bond purchase program, which will strengthen the US dollar's position on the world stage even more. However, if the European currency falls even further in the near future, then the demand for it will increase even more in anticipation of such measures from the European Central Bank, which, as we all know, has recently been following the Fed's example and with a slight delay. A number of important fundamental reports on the US labor market will be published this week, as well as many speeches by the heads of world central banks that are set to take place, which will help traders decide on the future course of monetary policy. Most likely, the trend towards the strengthening of the US dollar will continue this week, but it will be more and more difficult for the bears to pull down the pair. The COT report indicates that long non-commercial positions fell from 210,816 to 207,863, while short non-commercial positions rose from 92,630 to 118,806. It should be understood that the latest data on activity in the euro manufacturing sector and the service sector indicated that the eurozone economy is on track for strong growth in the summer, which will necessarily affect the prospects for its recovery after the coronavirus pandemic. This is the key to a medium-term upward trend in the European currency. The total non-commercial net position decreased from the level of 118,186 to the level of 89,057. The weekly closing price decreased from the level of 1.2121 to the level of 1.1912.

The bulls have problems with succeeding growth, and the beginning of this week, without updating the highs, may lead to a larger downward correction of the pair. The indicator of consumer confidence in the eurozone for June will be released this morning, which promises to be quite good, but the rise in the German consumer price index will be more important. If the indicator turns out to be better than the forecasts of economists, it will be another call for the ECB to think about changing monetary policy. Until the bulls regain control of the 1.1932 resistance, it will be rather difficult to talk about the euro's growth. Only a breakthrough and consolidation at this level with a reverse test from top to bottom can generate a signal for you to open long positions in hopes of resuming the upward trend to the area of last week's high at 1.1974. Being able to surpass this level with a similar consolidation can create an additional entry point to buy, which will lead EUR/USD to new local highs in the area of 1.2032 and 1.2063, where I recommend taking profits. The next target will be the resistance at 1.2103. In case we receive disappointing data on the eurozone and the euro falls during the European session, then it is best not to rush to open long positions. You can open longs if a false breakout is formed in the support area of 1.1885. I recommend buying EUR/USD immediately on a rebound only after the first test of the monthly low of the 1.1852 area, counting on an upward rebound of 15-20 points within the day.

To open short positions on EUR/USD, you need:

The bears will fight to maintain control of the market, and in order to do so they need to keep the pair below the resistance of 1.1932, formed at the end of yesterday. Forming a false breakout there, along with weak data on inflation in Germany, will create a signal to sell the euro in order to pull it down to the lower border of the 1.1885 horizontal channel. A breakthrough of this level and a test from the bottom up will return the pair to the downward trend that was formed after the Fed meeting, which will open the way to the low of 1.1852. Its breakdown will only be a matter of time. However, it is possible to open short positions there only after the renewal of this area from the bottom up, which will pull down the pair even lower to the support of 1.1805, where I recommend taking profits. If the bears are not active in the 1.1932 area in the first half of the day, then I recommend opening short positions immediately on a rebound from the resistance at 1.1974, or even higher - from a high of 1.2032 counting on a downward correction of 15-20 points. The test of the 1.2032 level will put a "cross" on all attempts by the bears to continue the downward trend.

Indicator signals:

Trading is carried out in the area of 30 and 50 moving averages, which indicates the sideways nature of the market and the lack of direction for the pair.

Moving averages

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

A breakthrough of the upper border of the indicator in the area of 1.1940 will lead to a new wave of euro growth. Surpassing the lower border of the indicator in the area of 1.1910 will increase the pressure on the pair.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that 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.
• Total non-commercial net position is the difference between short and long positions of non-commercial traders.