To open long positions on EURUSD, you need to:

In the first half of the day, inflation in the eurozone countries was not surprising, completely coinciding with the forecasts of economists, and the foreign trade balance declined significantly, which did not allow euro buyers to gain a foothold above the resistance of 1.2132. Let's look at the 5-minute chart and analyze what happened. It is visible how the bulls break above the level of 1.2132 and then there is a reverse test of this area from top to bottom, which leads to the formation of a buy signal. But it was not possible to stay above this range and the euro quickly fell, so we had to fix losses. In the second half of the day, the technical picture has completely changed and the market is now on the side of euro sellers.

The main task of the bulls will be to protect the support of 1.2107, to which the pair is now gradually declining. The formation of a false breakdown, together with weak data on the US economy, will allow us to count on the recovery of EUR/USD in the second half of the day. But given that we have a Federal Reserve meeting tomorrow, the bulls may ignore this level and let the euro go lower. In this case, I recommend considering new long positions only for a rebound from the larger support of 1.2063 in the expectation of an upward correction of 15-20 points within the day. If the bulls manage to meet the task and manage to protect the support of 1.2107, then their target will be the resistance of 1.2148. A breakout and consolidation above this range will lead the pair to the area of the maximum of 1.2190, where I recommend taking the profit.

To open short positions on EURUSD, you need to:

The bears coped with their task and regained control of the market. The focus will now shift to US retail sales data. A break in the support of 1.2107 and its reverse test from the bottom up forms a signal to open short positions in the continuation of the downward market with a gradual exit to a new low of 1.2063. A more distant goal will be the support of 1.2025, where I recommend fixing the profit. Under the scenario of the euro's growth during the US session, sellers will probably focus on the resistance of 1.2148. The formation of a false breakout forms a signal to open short positions in the expectation of a further fall of the pair. In the scenario of the absence of bear activity, it is best to postpone sales to a larger resistance of 1.2190, based on a downward correction of 15-20 points within the day.

Let me remind you that the COT report (Commitment of Traders) for June 8 noted a reduction in both long and short positions. It pointed to profit-taking and the exit of traders from the market before the important meeting of the European Central Bank, which resulted in no changes in monetary policy. Traders were concerned about what would happen to the bond-buying program. However, it remained unchanged, which did not allow euro buyers to keep the market under their control. The pair is now at risk of significantly adjusting its positions ahead of an important meeting of the Federal Reserve System, the results of which will set the direction of the market for the next few weeks. The dollar can only hope that this summer the Federal Reserve will seriously talk about reducing the volume of bond purchases. If this does not happen, risk appetite will increase and we will see a recovery in the euro. The COT report shows that long non-profit positions declined from the level of 237,360 to the level of 232,103, while short non-profit positions also fell from the level of 128,038 to the level of 124,890. The more the European currency falls, the more interest it will arouse among traders, as the eurozone economy will demonstrate excellent growth rates in the summer period, which will necessarily affect the prospects for its recovery after the coronavirus pandemic. The total non-profit net position decreased from 109,322 to 107,213. The weekly closing price also fell from 1.22326 to 1.21907.

Signals of indicators:

Moving averages

Trading is conducted in the area of 30 and 50 daily moving averages, which indicates the sideways nature of the market so far.

Note: The period and prices of the 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

A break of the lower limit of the indicator in the area of 1.2107 will lead to a new wave of decline in the euro.

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.