FX.co ★ EUR/USD: plan for the US session on August 24 (analysis of morning deals). Euro buyers are puzzling over how they can break above 1.1750

To open long positions on EURUSD, you need:

Data on the volume of German GDP only slightly exceeded the forecasts of economists, which did not particularly help the European currency to continue growing against the US dollar. If you look at the 5-minute chart, you will see that the pair did not reach any of the levels I indicated in the morning. In this regard, there were no signals for entering the market. Low volatility after yesterday's strengthening of the euro is likely to continue in the second half of the day since nothing serious about the American economy from the news is waiting for us today. From a technical point of view, nothing has changed. The key target of the bulls for the second half of the day is the breakdown of the level of 1.1750. A break in this area with a reverse test from top to bottom forms a signal to open long positions in the expectation of further euro recovery and a continuation of the upward trend that we observed at the end of last week. The nearest target will be the area of 1.1774. Its breakthrough with a similar consolidation forms a new entry point for purchases, which will lead EUR/USD to the local levels: 1.1799 and 1.1829, where I recommend fixing the profits. In the case of strong data on the real estate market in the United States, it is best not to rush into purchases. Long positions can be opened if a false breakdown is formed in the area of 1.1725, where the moving averages that play on the bulls' side are located. I advise buying EUR/USD immediately for a rebound only after the first test of the minimum of 1.1696, or even lower - from the level of 1.1666, counting on an upward rebound of 15-20 points within the day.

To open short positions on EURUSD, you need:

Bears are also not showing many initiatives yet, as clear evidence of the end of the bearish trend forces them to take a wait-and-see position, confirmed by the COT report, which I mentioned in my morning forecast. Good data on the Fed-Richmond manufacturing index and the recovery of activity in the primary housing market in the United States will strengthen the position of the US dollar. Therefore, forming a false breakdown in the resistance area of 1.1750 will give an excellent entry point into short positions to reduce to 1.1725. A breakout and a test of this area from the bottom up will increase the pressure on the pair and open the way to the lows: 1.1696 and 1.1666, where I recommend fixing the profits. In the absence of bear activity in the area of 1.1750 and weak US data during the US session today, I advise you to open short positions only after forming a false breakdown in the area of 1.1774. It is best to sell EUR/USD immediately for a rebound only after testing a new local resistance of 1.1799, or even higher - around 1.1829, counting on a downward correction of 15-20 points.

The COT report (Commitment of Traders) for August 17 showed a clear increase in traders' interest in the market, as long positions grew quite seriously. However, short positions remained almost unchanged, indicating that buyers of risky assets are feeling the bottom. The data on eurozone GDP and inflation released last week fully coincided with the forecasts of economists, which is generally not bad since everything is going according to the expectations and plans of the European Central Bank. The situation changed in the direction of buyers after the publication of the minutes of the meeting of the Federal Reserve System of the United States of America, where the members of the committee's views on future policy were divided – this supported risky assets and led to a stop of the downward trend for the pair. The lack of guidance due to the new strain of Delta coronavirus and the incomprehensible reaction of the European economy forces the European Central Bank to continue to adhere to a wait-and-see position and maintain a stimulating policy at current levels, which limits the upward potential of the pair. The COT report indicates that long non-commercial positions increased from the level of 212,809 to the level of 233,529, while short non-commercial positions decreased from the level of 178,952 to 175,889. At the end of the week, the total non-commercial net position increased from the level of 33,857 to the level of 57,640. The weekly closing price also rose from 1.1736 and 1.1777.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates the continuation of the upward correction for the pair.

Note: The author considers the period and prices of moving averages 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 1.1730 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.