Black Pipper

Forex Dreamers

Euro clings to 1.2025 and forms a buy signal.

To open long positions on EURUSD you need:

In my morning forecast, I focused on the support level 1.2025 and recommended opening long positions from it. Let’s take a look at the 5-minute chart and see what happened. You can clearly see how the bulls achieve a false breakout in the 1.2025 area, forming an excellent entry point into long positions from there. At the same time, the main target remained the level 1.2079. At the time of preparing the review, the pair passed about 40 points from the entry level. The decisions of the European Central Bakan and the statements of its president Christine Lagarde did not scare away euro buyers from the market.

Taking into account that the pair remained to trade in the channel, the strategy of euro buyers for the second half of the day is as follows: only a breakout and consolidation above the level of 1.2079, with a reverse test of it from top to bottom, forms a signal to open new long positions, counting on the continuation of the upward trend already in the resistance area of ​​1.2133 , where I recommend taking profits. The next target will be the high at 1.2180. If during the American trading the pressure on the euro rises again, and the pair returns to the support of the 1.2025 support, it is necessary to act according to the morning scenario. Only the formation of a false breakout in this range (by analogy with what I discussed above) forms a good entry point into long positions with the main goal of returning to the level of 1.2079. In the scenario of the absence of bulls’ activity in the area of ​​1.2025, I recommend postponing long positions until the minimum of 1.1975 is renewed, from where you can buy the euro immediately on a rebound with the aim of an upward correction of 20-25 points within the day. The next big support is seen at the 1.1924 area.

Also read  Overview of the EUR / USD pair. April 30. The Fed and Powell did not surprise the market with anything. The dollar would continue to fall anyway.

To open short positions on EURUSD you need:

The sellers failed to cope with the tasks and their main goal for the second half of the day will be to protect the resistance at 1.2079. Only the formation of a false breakout there will lead to the formation of a good entry point to short positions in the expectation of a decline in EUR / USD to support 1.2025. In the scenario of the absence of sellers’ activity in the area of ​​1.2079: it is best to postpone sales until a new local maximum in the area of ​​1.2133 is updated, counting on a downward correction of 20-25 points within the day. An equally important task for sellers will be the breakdown of support at 1.2025, a test of which from the bottom up on the volume will lead to the formation of a good signal to open short positions in the continuation of the downward trend towards the minimum of 1.1975. A similar breakout and test of this level will open a direct road to a further target in the 1.1924 area, where I recommend taking profits. Updating this level will lead to a complete reversal of the bull market seen earlier this week.

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I recommend that you familiarize yourself with my video forecast for today.

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Let me remind you that in the COT report (Commitment of Traders) for April 13, the indicators of long and short positions have undergone a number of changes – both short and long positions have decreased, which indicates a more cautious approach of traders to the market. It is important that long positions, although they continued to decline, but at a slower pace, which may signal the end of the bear market. Last week was full of not very good fundamental statistics for the euro area, which turned out to be either worse than economists’ forecasts, or coincided with them, which limited the upward potential of the pair. However, talk that the European Central Bank is beginning to think about curtailing the bond buyback program already in the 3rd quarter of this year makes investors look closely at risky assets, which will favorably affect the position of the European currency in the near future. The news that the vaccination program carried out in the EU countries is beginning to yield results makes it possible to count on the lifting of restrictions and a more active recovery of the eurozone services sector, which will inspire hope for an improved economic outlook and return the EUR / USD to an upward trend. The COT report indicated that long non-commercial positions fell from 192,230 to 190,640, while short non-commercial positions fell from 124,708 to 123,789, indicating short profit taking and a more cautious bears approach. As a result, the total non-commercial net position continued to decline and amounted to 66,851 against 67,522 against a week earlier. But the weekly closing price rose significantly to the level of 1.1911 against 1.1816 against last week.

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Indicator signals:

Moving averages

Trading is carried out in the area of ​​30 and 50 day moving averages, which indicates the sideways nature of the market.

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 breakout of the lower border of the indicator in the area of ​​1.2025 will lead to a fall in the euro.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.
  • MACD indicator (Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands Period 20
  • Non-commercial traders are speculators such as individual traders, hedge funds and large institutions who 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.
  • Non-commercial short positions represent the total short open position of non-commercial traders.
  • The total non-commercial net position is the difference between short and long positions of non-commercial traders.

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