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

Quite expectedly, yesterday passed in a horizontal channel with low volatility due to the lack of important fundamental reports. Let's take a look at the 5 minute chart and talk about how the entry point for longs was formed in the afternoon. The repeated descent and an update of support at 1.1760, that we almost missed in the first half of the day, resulted in creating a signal to buy the euro during the US session. However, there was no major growth from this range: the most that we could count on was 20 points.

Before talking about the prospects for the EUR/USD movement, let's see what happened in the futures market and how the Commitment of Traders (COT) positions changed. The COT report for March 23 shows that the indicators of long and short positions remained practically unchanged, which indicates a clear lack of willingness to buy euros in the short term. The delta growth was due to a slight decline in short positions, and not because of an influx of new buyers. Traders are now entirely focused on the problems with the EU vaccination program and bureaucratic delays in the implementation of the Recovery Fund - they will be the main reason for the weak growth of the eurozone economy after the Covid-19 pandemic this year, making it lag behind other developed countries. This is reflected in the euro's rate, which continues to lose its positions against the US dollar. For this reason, the market remains on the side of sellers of risky assets, which may lead to forming a succeeding downward trend.

The dollar's position will only strengthen in the event of another round of growth in the yield of ten-year US bonds. Investors expect the United States to be the first to start raising interest rates, which makes the dollar more attractive. At the moment, it is best not to rush into buying euros, but to wait for lower prices. Another factor of medium-term pressure on the euro is the fact that many European countries are in quarantine due to the coronavirus. The recent rollback of social distancing measures has led to new outbreaks of disease in the population, forcing many governments to revert to previous measures. One can expect an improvement in the economic outlook for the eurozone only when restrictions are lifted and the service sector is restored, which will return the medium-term trend of strengthening EUR/USD. The COT report indicated that long non-commercial positions fell to 195,500 from 195,857, while short non-commercial positions fell further from 105,881 to 102,178. As a result, the total non-commercial net position broke its five-week downward trend and slightly rose from 89,976 to 93,332. The weekly closing price was 1.1932 against 1.1926 a week earlier.

From a technical point of view, nothing has changed. The main task of the euro bulls in the first half of the day is to protect support at 1.1760. Forming a false breakout there generates a signal to open long positions in hopes of an upward correction and a return to the resistance of 1.1802, above which we did not surpass yesterday. A breakout and consolidation at this level creates an additional entry point into long positions for the purpose of reaching a high like 1.1842, where I recommend taking profits. Good reports on the indicator of consumer confidence in the euro area and inflation in Germany may contribute to the realization of such a scenario. The EUR/USD will likely be under pressure if the bulls are not that active in the support area of 1.1760. In this case, I advise you to open new long positions on a rebound after updating the following lows: 1.1714 and 1.1682. You can count on them for an upward correction of 20-25 points within the day.

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

The bears have come close to the important support (1.1760) and now the whole emphasis is on it. A breakthrough and test of the 1.1760 level from the bottom up creates an excellent signal to enter the market in continuing the euro's decline that was observed last week. In this case, the closest targets will be the lows: 1.1714 and 1.1682, where I recommend taking profits. In case EUR/USD grows in the first half of the day, then it is best not to rush to sell: the best option for opening short positions will be to form a false breakout in the resistance area of 1.1802. If the bears are not that active there, then I recommend postponing short positions immediately for a rebound from a large resistance at 1.1842, counting on a downward correction of 20-25 points within the day.

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the bears to resume the downtrend in the euro.

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

If the euro grows in the first half of the day, the upper border of the indicator in the area of 1.1771 will lead to a new wave of growth for the pair. A breakout of the lower border around 1.1760 will raise the pressure on the euro.

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.