Black Pipper

Forex Dreamers

Plan for the European session on April 29. Commitment of Traders COT reports (analysis of yesterday’s deals). Euro breaks through

To open long positions on EURUSD you need:

In my reviews yesterday, I talked a lot about the fact that if the Federal Reserve System leaves interest rates unchanged, then the European currency has every chance of growth. Let’s take a look at the 5-minute chart and see what happened after the publication of the central bank’s decision. It is clearly seen how the repeated breakout of the resistance at 1.2093 led to an active growth of the euro, however, it was not possible to enter long positions from there, since the reverse test of this level from top to bottom did not take place. All that we managed to do yesterday afternoon was to sell immediately on the rebound from the resistance of 1.2133. The first test of this level led to the expected downward correction by 20 points. No other signals were generated.

The technical picture of the pair has also changed significantly. Today will start with a series of fundamental reports on the labor market and inflation in Germany, where indicators will be below the forecasts of economists, which will limit the upward potential of the pair. Also during the European session, a report will be released on the indicator of consumer confidence in the eurozone for April, where the indicator may create some problems for the euro bulls, as the coronavirus pandemic and the next isolation measures have contributed. Buyers of the European currency need to think about how to break above the new resistance at 1.2151. 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 ​​a new monthly maximum of 1.2197, where I recommend taking profits. The next target will be the level of 1.2240, but we will be able to recover to it only after the speeches of the representatives of the European Central Bank, as well as the publication of data on the growth rates of the American economy in the 1st quarter of this year. 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 ​​1.2105, where the moving averages are, playing on the side of buyers. In the scenario of no bulls’ activity and at the minimum of 1.2105, it is best to postpone long positions until the new lower boundary of the weekly sideways channel near 1.2060 is updated, 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.

Also read  General analysis and forecast of GBP / USD for today, April 22, 2021

To open short positions on EURUSD you need:

The bears missed their chance and all that remains for them is the protection of the nearest resistance levels. The main task of the sellers in the first half of the day is to form a false breakout in the resistance area of ​​1.2151, since only this scenario creates a good signal to open short positions in the expectation of a larger downward correction to the support area of ​​1.2105. A breakthrough of this range will be no less important task. Only a reverse test of the level from the bottom up will form a new entry point into short positions with the goal of entering the minimum of 1.2060, where I recommend taking profits. If the bears do not show activity in the area of ​​1.2151, and the bulls manage to take this range for themselves, it is best to refuse to sell until EUR / USD reaches a new local maximum in the area of ​​1.2197. You can also sell the euro on a rebound from the level of 1.2239 in the expectation of a downward correction of 20-25 points within the day.

Also read  Euro makes a biggest monthly fall since 2019

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

Let me remind you that in the COT report (Commitment of Traders) for April 20, the indicators of long and short positions have changed quite seriously – short positions have decreased, and long ones have increased significantly, which indicates more active purchases of the euro by players. The news that the vaccination program in the European Union is bearing fruit is supporting the euro, as well as the fact that large eurozone countries will begin to more actively withdraw from quarantine in the near future. 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 administration 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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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates a resumption of the bull 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 upper border of the indicator in the area of ​​1.2160 will lead to a new wave of euro growth. In case of a decline in the pair, support will be provided by the lower border of the indicator in the area of ​​1.2060.

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.
  • Indicator MACD (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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