FX.co ★ EUR/USD: plan for the US session on July 26 (analysis of morning deals).

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to 1.1784 and recommended making decisions on entering the market from it. Let's look at the 5-minute chart and talk about what happened. The data released in the first half of the day on the indicator of conditions for the German business environment did not meet the expectations of economists, which led to a sharp decline in the euro. However, this fall was quickly recouped, and the bulls again consolidated above the range of 1.1784. Unfortunately, it was impossible to achieve signals for entering the market from this level, since each time it broke through, then up, then down. In the second half of the day, the focus will be on the new resistance of 1.1807.

As long as the trade is conducted above 1.1784, the demand for the euro will remain. The key task of the bulls for the American session will be to protect the support of 1.1784. The formation of a false breakdown on it after the data on the US housing market will lead to the formation of an additional entry point into long positions, which will open a direct road to a maximum of 1.1807. An equally important task for the bulls will be to break through this resistance. The test of 1.1807 from top to bottom on the volume forms a signal to open long positions in continuation of the upward trend to update the maximum of last week in the area of 1.1829, where I recommend fixing the profits. A more distant target will be the area of 1.1849. If buyers do not show activity in the area of 1.1784, in this case, I recommend postponing long positions until the update of the larger support of 1.1758, which coincides with the lower border of the side channel in which the euro spent the entire last week. You can buy immediately for a rebound based on an upward correction of 15-20 points within the day.

To open short positions on EURUSD, you need:

Although the sellers tried, they did not cope with their task and missed the level of 1.1784. Now the primary goal is to return this range under control. A breakdown and a test of this level from the bottom up will form an excellent entry point for short positions in the expectation of a decline to the lower border of the side channel 1.1758, where I recommend fixing the profits. A breakdown of this area will also return the pair to a downward trend, which will quickly push EUR/USD to new lows: 1.1737 and 1.1715. If EUR/USD rises during the US session, the sellers' focus will shift to the protection of the resistance of 1.1807. It is best to open short positions only when a false breakdown is formed. In the absence of bear activity and weak fundamental statistics on the US economy in the housing market, I advise you to postpone sales until the test of a larger resistance of 1.1829. But even there, it is possible to open short positions only after forming a false breakdown. I recommend selling the pair immediately for a rebound based on a downward correction of 15-20 points only from the maximum of 1.1849.

In the COT report (Commitment of Traders) for July 13, there was a market bias towards sellers of risky assets. And although the long positions have not changed in any way, the sharp growth of short positions has led to another reduction in the overall positive net position. The fact that American inflation continues to grow and both Jerome Powell and President Joe Biden speak about it indicates the seriousness of the situation. And no matter how the central bank tries to convince investors that this is just a temporary phenomenon, the market continues to abandon risky assets favoring safe-haven assets, which is the US dollar. This week, the picture can only get worse, as the European Central Bank will hold a meeting on Thursday. Politicians will announce a new mandate regarding the long-term rate of inflation in the eurozone, which may lead to a revision of plans for monetary policy in the near future. It will be a certain shock for the euro, and it isn't easy to guess what the market reaction will be. But the lower the euro falls, the higher the demand for it will be in the medium term since the attractiveness of risky assets has not gone away. The COT report indicates that long non-commercial positions remained virtually unchanged and decreased from the level of 212,998 to the level of 212,851.

In contrast, short non-commercial positions increased from the level of 135,808 to the level of 153,138. In addition to the decision of the European Central Bank, we are waiting for interesting fundamental statistics on the activity of the service sector and the manufacturing sector of the eurozone countries, which can affect the direction of the euro in the short term. The total non-commercial net position decreased from the level of 77,190 to the level of 59,713. The weekly closing price remained unchanged at 1.1862.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily moving averages. However, euro buyers continue to impose their conditions.

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

In case of a decline in the pair, the lower border of the indicator in the area of 1.1758 will provide support.

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 specific 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.