FX.co ★ EUR/USD: plan for the US session on July 6 (analysis of morning deals).

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to the level of 1.1882 and recommended that you make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened. It is visible how the bulls quite easily breakthrough above the resistance of 1.1882 and then test it from top to bottom, forming a strong signal to open long positions in the continuation of the upward trend. However, the data on the index of sentiment in the business environment of Germany and the eurozone from the ZEW institute completely canceled the bulls' plans. The sharp drop in the indicator led to the same rapid decline in risky assets against the US dollar. As a result, a loss was received on the signal.

At the moment, the technical picture in the pair has changed and it is necessary to rely on completely different levels. In the afternoon, we are waiting for PMI reports for the US services sector. If the indicator turns out to be worse than economists' forecasts, the market may react with growth to the data. Therefore, the initial goal of buyers is to return the resistance of 1.1851 under control, which was formed in the first half of the day. A reverse test of this level from top to bottom will lead to the formation of a signal to open long positions to recover in the area of today's maximum of 1.1893, where I recommend fixing the profits. It is unlikely that we will be able to count on a breakdown of this level. But even against the background of a decline in the euro, buyers should not despair, since the market is still on their side and they managed to update a new high in the first half of the day. In the event of a further decline in the pair, it is best to return to long positions immediately for a rebound from this month's low in the area of 1.1805, counting on an upward correction of 15-20 points within the day.

To open short positions on EURUSD, you need:

Sellers still have an important task to protect the resistance of 1.1851, which they managed to form in the first half of the day. The formation of a false breakdown in the second half of the day will lead to the formation of a signal to open short positions to further reduce the pair to the support of 1.1805, where I recommend fixing the profits. A more distant target will be the area of 1.1769, the update of which will cancel out all the hopes of euro buyers for a further upward correction of the pair. If the big bears retreat from the market after the data on activity in the US private sector and do not show themselves in the resistance area of 1.1851, then I recommend postponing sales of EUR/USD until the test of the next major level of 1.1893, from which you can open short positions immediately for a rebound based on a downward correction of 15-20 points within the day. The next area for sales is viewed in the area of 1.1930.

Let me remind you that there were minor changes in the COT report (Commitment of Traders) for June 29. It was possible to observe a higher growth of short positions and only a slight recovery of long ones. After several meetings with central banks, the market is gradually recovering. However, buyers of risky assets are not ready to act, as they are afraid of changes in the monetary policy of the Federal Reserve System. The fact that the data on the labor market in the United States of America indicated an increase in the unemployment rate cooled the desire to buy the US dollar in the short term, which hurt the downward trend of the EUR/USD pair that we have observed recently. It suggests that until the autumn of this year, the regulator is unlikely to resort to changing the bond purchase program, which will negatively affect the prospects of the US dollar in the summer period. There is no desire among traders to buy the European currency since no one expects such measures from the European Central Bank either. Most likely, the pair will spend most of this week in a sideways channel with the prospect of a slight weakening of the US dollar. The COT report indicates that long non-commercial positions increased from the level of 207,863 to the level of 209,058, while short non-commercial positions increased from the level of 118,806 to the level of 121,912. Good data on the European economy this week may revive euro buyers, as everyone expects that the eurozone economy will show strong growth in the summer period. It is the key to a medium-term upward trend in the European currency. The total non-commercial net position decreased from the level of 89,057 to the level of 87,146. The weekly closing price increased from the level of 1.1.1912 to the level of 1.1928.

Signals of indicators:

Moving averages

Trading is conducted below 30 and 50 daily moving averages, which indicates an attempt by bears to reverse the 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 the classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pair grows, the upper limit of the indicator in the area of 1.1893 will act as a resistance.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit 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 the short and long positions of non-commercial traders.