To open long positions on EURUSD, you need:

In the first half of the day, data on the PMI index for the eurozone services sector was released, which positively affected the direction of the European currency. However, due to Independence Day in the United States, there were no particularly active actions of bulls in the market. Let's look at the 5-minute chart and talk about what happened. Buyers got close to the resistance of 1.1872 and even attempted to consolidate above this level after a good PMI report for the services sector. However, there were no more people willing to buy the euro at higher prices. The formation of a false breakout, which can now be observed on the chart, may lead to the formation of an entry point into short positions, which will increase pressure on the euro in the second half of the day.

The absence of data during the US session and the day off in the US will drag the market into a narrow side channel, from which it will be quite difficult to get out. If the buyers of the euro still managed to gain a foothold above the level of 1.1872 and test it from top to bottom, then only after that it will be possible to count on the continuation of the upward correction already to the area of the highs of 1.1921 and 1.1974, where I recommend fixing the profits. But given the volume of trading today, it is unlikely that we will see a major continuation of growth. If the EUR/USD pair still returns to the level of 1.1872, it is better not to rush with long positions. The optimal scenario will be purchases immediately for a rebound from the support of 1.1839, for which the bulls were very actively fighting last Friday. Also, long positions can be viewed as a rebound from a larger monthly low in the area of 1.1805, based on an upward correction of 15-20 points within the day.

To open short positions on EURUSD, you need:

Sellers still have an important task to return the level of 1.1872 under control. Fixing in the second half of the day below this range will lead to the formation of a false breakdown and the formation of a signal to open short positions to reduce to the support of 1.1839, where I recommend fixing the profits. A more distant target will be the area of 1.1805, the update of which will cancel out all the hopes of euro buyers for a further upward correction of the pair. If the big bears are still on the sidelines, then I recommend postponing the sale of EUR/USD until the test of a large resistance of 1.1921, from which you can open short positions immediately for a rebound, counting on a downward correction of 15-20 points within the day. However, it is unlikely that the volatility will be so high today. Thus, it is best to refrain from active trading today because of the weekend in the United States.

Let me remind you that there were significant changes in the COT report (Commitment of Traders) for June 22: long positions sharply decreased and short ones increased. Such changes occurred after the Federal Reserve's meeting on interest rates. Let me remind you that during the last meeting, the central bank made the first hints about an earlier increase in interest rates. Some members of the Fed expect such changes as early as 2022. It suggests that the regulator may begin to wind down its bond purchase program in the near future, which will strengthen the position of the US dollar on the world stage even more. However, the more the European currency falls in the near future, the higher the demand for it will be in anticipation of such measures from the European Central Bank, which has recently been acting on the example of the Fed. This week, several important fundamental reports on the US labor market will be published, and there will also be quite a lot of speeches by the heads of the world's central banks that will help traders decide on the future course of monetary policy. Most likely, the trend for strengthening the US dollar will continue this week. However, it will be more difficult for euro sellers to push the pair down. The COT report indicates that long non-commercial positions decreased from the level of 210,816 to the level of 207,863, while short non-commercial positions increased from the level of 92,630 to the level of 118,806. It should be understood that the latest data on activity in the euro manufacturing sector and the service sector indicated that the eurozone economy is aimed at strong growth in the summer, which will necessarily affect the prospects for its recovery after the coronavirus pandemic. It is the key to a medium-term upward trend in the European currency. The total non-commercial net position decreased from the level of 118,186 to the level of 89,057. The weekly closing price decreased from the level of 1.2121 to the level of 1.1912.

Signals of indicators:

Moving averages

Trading is conducted above the 30 and 50 daily moving averages, which indicates an attempt by euro buyers to continue the pair's growth.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

In the event of a decline in the euro, the lower limit of the indicator in the area of 1.1840 will act as support.

Description of indicators

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