FX.co ★ EUR/USD: the plan for the European session on March 11. Commitment of Traders COT reports (analysis of yesterday's transactions). The US dollar rose again

To open long positions on EURUSD, you need:

Yesterday, several signals were formed to enter the market. Let's look at the 5-minute chart and figure out what happened. In my morning forecast, I paid attention to the level of 1.1080 and recommended making decisions on entering the market. There were no fundamental statistics in the first half of the day, so the focus shifted to the meeting of the European Central Bank, the results of which led to a surge in market volatility. Despite the growth of the euro during the European session, it was not possible to achieve a normal false breakdown from the level of 1.1080. For this reason, I have not seen any deals on the pair. In the afternoon, after the breakdown of 1.1080 and the reverse test of this level from top to bottom, an excellent signal was formed to buy the euro. However, after moving up by 25 points, the pressure on the pair returned, as a report on inflation in the US was published - indicating its growth. As a result, the pair failed below 1.1017, and the reverse test of this level from the bottom up gave an excellent entry point to sell. The drop was more than 35 points. And what were the entry points for the pound?

Today, we do not have important reports on the eurozone, but the data on inflation in Germany will attract attention. Yesterday's statements by the President of the European Central Bank, Christine Lagarde, about the need for a tighter monetary policy surprised the markets, which will support the pair in the event of a change in geopolitical tensions in the world. Today's rise in German inflation will be a confirmation of the central bank's correct approach to policy. An important task of the bulls for the first half of the day is to protect the support of 1.0947, however, to return the market to its control, it would be nice to get above 1.1017, where the moving averages are already playing on the side of the bears. In the case of weak inflation in Germany and another sell-off of the European currency, only a false breakdown at 1.0947 forms the first entry point into long positions, counting on the pair's return to the area of 1.1017. To see a larger upward movement in EUR/USD, active actions and a breakout of this range are needed. The top-down test will give a buy signal and open up the possibility of restoring the pair to the area of 1.1066 and 1.1115. The breakdown of this range will also cancel out the bearish trend and hit the sellers' stop orders, even more, opening a direct road to the highs: 1.1176 and 1.1229, where I recommend fixing the profits. Do not forget the geopolitical situation: with the further aggravation of the conflict, the demand for the US dollar can quickly return. Considering that yesterday's meeting of representatives of the two countries did not yield any results, it is most likely not necessary to expect serious demand for risky assets. The optimal scenario for buying would be a false breakdown of the minimum in the area of 1.0879, but it is possible to open long positions on the euro immediately for a rebound only below 1.0810 with the aim of an upward correction of 30-35 points within a day.

To open short positions on EURUSD, you need:

Bears quickly returned to the market after yesterday's inflation report in the US, indicating another jump in the consumer price index to the maximum in 40 years. Most likely, the pressure on the euro will continue today, and it is best to bet on the strengthening of the US dollar. In the current conditions, it is not yet known how the position of the Federal Reserve System will change by the meeting of the committee, which will be held next week - this is a very strong bullish signal for the US dollar. Sellers of the euro today need to think about how to protect the resistance of 1.1017, as by releasing a pair above this range, demand will return. The formation of a false breakdown after the German inflation data will lead to a sell signal and the opening of new short positions with the aim of further decline to the first support of 1.0947. The breakdown of this area will not take long to wait. The reverse test from the bottom up can take place very quickly, which will give an additional signal to open short positions already with the prospect of falling to the levels: 1.0879 and 1.0810 are the minimum of this year. The downward movement will be fast, as a large number of buyers' stop orders are concentrated at these levels. However, such a large sale is possible only with very negative news from Ukraine. If the euro rises and there are no bears at 1.1017, the bulls will start to feel much better - still, the expected rate hike from the ECB in October is good news. In this case, it is best to take your time with sales. The optimal scenario will be short positions when forming a false breakdown in the area of 1.1066. You can sell EUR/USD immediately on a rebound from 1.1115, or even higher - around 1.1176 with the aim of a downward correction of 15-20 points.

The COT report (Commitment of Traders) for March 1 recorded an increase in both long and short positions. The first ones turned out to be more, which led to an increase in the positive delta. In the context of the ongoing tough geopolitical conflict that has affected almost the whole world, it makes no sense to talk about what position investors held a week ago since everything is changing at lightning speed. The data that was yesterday no longer have any significance today, since no one knows how the sanctions imposed by the United States and EU countries will affect the Russian economy, as well as what the conflict between Russia and Ukraine will eventually lead to. The main question is how long it will last. Against this background, it does not matter much what the policy of the European Central Bank or the Federal Reserve System will be since, in the event of an aggravation of the military conflict, the markets will fly down again. Now Russia and Ukraine have sat down at the negotiating table, and a lot will depend on the results of these meetings - there will be a lot of them. This week, the European Central Bank will also hold a meeting and important February data on US inflation will be released, which will lead to a surge in volatility, but it is unlikely to correct the situation in favor of buyers of risky assets. I recommend continuing to buy a dollar. I advise you to be quite careful about risky assets and buy euros only as the tense relations between Russia, Ukraine, the EU, and the USA weaken. Any new sanctions actions against the Russian Federation will have serious economic consequences, which will affect the financial markets, as well as affect not only the Russian ruble but also the European currency. The COT report indicates that long non-commercial positions increased from the level of 214,195 to the level of 228,385, while short non-commercial positions increased from the level of 154,163 to the level of 163,446. At the end of the week, the total non-commercial net position increased to 64,939 against 59,306. The weekly closing price dropped from 1.1309 to 1.1214.

Signals of indicators:

Moving averages

Trading is already below 30 and 50 daily moving averages, which indicates an attempt by bears to take the market under their control.

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 the case of growth, the upper indicator in the area of 1.1066 will act as resistance. If the euro falls, the lower border in the area of 1.0947 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 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.