To open long positions on EUR/USD, you need:

Yesterday was a fairly calm day. In the first half of the day, there was a signal to open short positions in the euro. The data on the PMI index for the services sector of the eurozone had a positive effect on the euro's direction, but due to the Independence Day in the United States, bulls were not particularly active in the market. Let's take a look at the 5 minute chart and talk about what happened. The bulls approached the 1.1872 resistance and even attempted to settle above this level after a good PMI report for the eurozone services sector. However, that was all over. The bears returned the pair below this level during the US session, which led to forming a false breakout and a signal to open short positions. But due to the weekend, a major fall in the euro also did not occur and the downward movement reached a high of 15 points. No other signals were generated.

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 (COT) positions have changed. There were minor changes in the COT report for June 29. One could observe a higher increase in short positions and only a slight retracement of long positions. After a series of central bank meetings, the market is gradually recovering, however, buyers of risky assets are not ready to act, as they fear changes in the Federal Reserve's monetary policy. The fact that the US labor market report indicated a rise in unemployment appears to have cooled the urge to buy the US dollar in the short term, which has hurt the EUR/USD downward trend that we have seen recently. This suggests that until the fall of this year, the central bank is unlikely to resort to changing the bond purchase program, which will negatively affect the prospects for the US dollar in the summer. Traders have no desire to buy the euro either, since no one expects such measures from the European Central Bank either. Apparently this week the pair will spend most of its time in a horizontal channel with the prospect of a slight weakening of the US dollar. The COT report indicated that long non-commercial positions rose from 207,863 to 209,058, while short non-commercial positions rose from 118,806 to 121,912. Good data on the European economy this week could revive the bulls, so everyone expects the eurozone economy to show strong growth in the summer. This is the key to a medium-term upward trend in the European currency. The total non-commercial net position decreased from 89,057 to 87,146. The weekly closing price increased from 1.1.1912 to 1.1928.

The bulls have problems with succeeding growth and in order for them to get out of the horizontal channel they need a good fundamental background. To do this, I recommend that you pay attention to today's reports on the index of sentiment in the German business environment from the ZEW Institute, as well as the volume of retail trade in the eurozone. The rise in indicators may help the bulls regain control over the resistance at 1.1882. Only a breakthrough and consolidation at this level with a reverse test from top to bottom generates a signal to open long positions in hopes of resuming the upward trend to the resistance area of 1.1921. Only a breakthrough of this area with a similar consolidation creates another entry point for long positions, which will lead EUR/USD to new local highs in the 1.1974 and 1.2032 areas, where I recommend taking profits. In case we receive a disappointing report on the eurozone and the pair falls during the European session, it is best not to rush to buy. Long positions can be opened subject to forming a false breakout in the support area of 1.1842, to which the bears did not reach yesterday. I recommend buying EUR/USD immediately on a rebound only after the first test of the monthly low of the 1.1805 area, counting on an upward rebound of 15-20 points within the day.

To open short positions on EUR/USD, you need:

The bears will struggle to keep the market under control as they are one step away to let it go. To do this, they need to keep the pair below the resistance of 1.1882, which has already helped the bears several times. Forming a false breakout there, along with weak data on Germany and the eurozone, will create a signal to sell the euro for the purpose of falling to the middle border of the horizontal channel at 1.1842. A breakthrough of this level and a test of it from the bottom up will return the pair to the downward trend formed after the Federal Reserve meeting, which will open the way to the low of 1.1805. Its breakthrough will only be a matter of time. However, it is possible to open short positions there only after the renewal of this area from the bottom up, which will push the pair even lower to the support of 1.1769, where I recommend taking profits. If the bears are not active in the 1.1882 area in the first half of the day, I recommend opening short positions immediately on a rebound from the resistance at 1.1921, or even higher - from a high of 1.1974, counting on a downward correction of 15-20 points. The test of the 1.1974 level will put an end to all of the bears' attempts to continue the downward trend.

Indicator signals:

Trading is carried out just above the 30 and 50 moving averages, which indicates an attempt by the bulls to continue the upward correction of the pair.

Moving averages

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 breakthrough of the upper border of the indicator in the area of 1.1882 will lead to a new wave of euro growth. Surpassing the lower border of the indicator in the area of 1.1855 will increase the pressure on the pair.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial 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 short and long positions of non-commercial traders.