Black Pipper

Forex Dreamers

Plan for the European session on April 27. Commitment of Traders COT reports (analysis of yesterday’s deals). Euro Buyers

To open long positions on EURUSD you need:

Yesterday only one signal to enter the market was formed, which was formed in the first half of the day. Let’s take a look at the 5-minute chart and analyze the entry point: reports on the indicator of business environment, the indicator for assessing the current situation and the indicator of economic expectations from IFO Germany did not meet the forecasts of economists, which led to the formation of some pressure on the euro and limited the upward potential of the pair. And even though the bulls tried to form a false breakdown at the level of 1.2089, which led to the formation of a good entry point into long positions, however, after rising by 20 points, the euro returned down to the support at 1.2089 and broke through it. In the second half of the day, it was not possible to wait for a good entry point, since I did not see a reverse test of the level 1.2089 from the bottom up.

I have analyzed all transactions in more detail in my video forecast.

Before talking about further prospects for the EUR / USD movement, let’s see what happened in the futures market and how the Commitment of Traders positions have changed. In the COT report (Commitment of Traders) for April 20, the indicators of long and short positions changed quite seriously – short positions decreased, and long positions increased significantly, which indicates more active buying of the euro from the side of players. The news that the vaccination program in the European Union is bearing fruit is supporting the euro, as well as the fact that in the near future the large countries of the eurozone will begin to more actively withdraw from quarantine. The decisions of the European Central Bank on monetary policy did not significantly affect the rate of the European currency, since no changes were made, as well as talks on the part of the ECB’s board about the high rate of the euro. The COT report indicated that long non-commercial positions jumped sharply from 190 640 to 197 137, while short non-commercial positions fell from 123 789 to 116 329, indicating an influx of new buyers with the expectation of continued growth of the euro. Therefore, it is not surprising that any calculation for a downward correction in the pair in the short term has failed in the past week. As a result, the total non-profit net position rose sharply from 66,851 to 80,808 a week earlier. The weekly closing price continued to rise to 1.2042 versus 1.1911 last week.

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Today, not much fundamental statistics are expected, but a two-day meeting of the Federal Reserve System on monetary policy starts, the results of which will be announced tomorrow. So don’t be surprised if market volatility is low enough. Bulls still need to think about how to regain the level of 1.2089. Considering that no important reports on the eurozone are expected in the first half of the day, it will be very problematic to do this. Only a breakout and consolidation above this range with a reverse test from top to bottom generates a signal to open new long positions with the expectation of a continuation of the upward trend already in the area of ​​the new high of 1.2133, where I recommend taking profits. The next target will be the level of 1.2180, but one can hardly bet on such an active growth of the pair before the publication of the Fed’s decision tomorrow. If the bulls show no activity in the first half of the day, a larger decline in EUR / USD can be expected. In this case, I recommend opening long positions only if a false breakout is formed in the area of ​​1.2047, which forms a good entry point to buy with the main goal of returning to the level of 1.2089. In the scenario of the absence of bulls’ activity and at the minimum of 1.2047, it is best to postpone long positions until the lower border of the side channel of the last week near 1.1998 is updated, from there you can buy the euro immediately on a rebound with the aim of an upward correction of 20-25 points within the day.

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To open short positions on EURUSD you need:

The initial task of the sellers, which they did an excellent job yesterday during the American session, is to protect the resistance at 1.2089. However, only the formation of a false breakout there in the first half of the day forms a good signal to open new short positions in the continuation of the current downward correction of the pair to a minimum of 1.2047, where I recommend taking profits. In case of a larger spike in volatility in the first half of the day: the next target will be the area of ​​1.1998, which is the lower border of the sideways channel of the previous week. However, we will be able to get there only in the afternoon with very good fundamental data on the American economy. If the bears do not show activity in the area of ​​1.2089, and the bulls manage to regain this range, it is best to refuse to sell until EUR / USD reaches a new local maximum in the area of ​​1.2133. You can also sell the euro on a rebound from the level of 1.2180, counting on a downward correction of 20-25 points within the day.

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GBP / USD: plan for the European session on April 27. Commitment of Traders COT reports (analysis of yesterday’s deals). The pound is in danger of falling below 1.3834. Buyers need to be more active at 1.3892

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Indicator signals:

Moving averages

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

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 upper border of the indicator in the area of ​​1.2105 will lead to a new wave of euro growth. A breakout of the lower border of the indicator in the area of ​​1.2065 will increase the pressure on the pair.

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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