17.06.202108:35 Forex-elemzések és áttekintések: EUR/USD: plan for the European session on June 17. COT reports. Fed will start raising US interest rates earlier than expected. Bears brace to surpass support at 1.1986

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

Before the Federal Reserve's decision on interest rates was announced, the market froze in anticipation of the results. If you look at the 5 minute chart, you will see that the levels that I paid attention to in my morning forecast were tested, while those in the afternoon forecast were not, there were no signals to enter the market. Low volatility at 25 points did not allow us to trade normally. After the decision of the central bank, the euro collapsed, which led to a change in the technical picture of the pair.

The fact that the Fed is planning to raise interest rates in 2022, and not in 2024, as originally expected, has led to a sharp strengthening of the US dollar against the euro. Most likely, the bearish market will continue, so the bulls need to act with caution in the near future. An inflation report on the eurozone will be released in the first half of the day, and if there are no serious discrepancies with economists' forecasts, most likely the euro will continue to fall. The main task of the bulls in the morning is to protect the support at 1.1986, but there is very little hope for that. Forming a false breakout there generates a signal to open long positions in hopes of a recovery to the resistance area of 1.2027, and then a larger upward correction to the area of the level of 1.2063, where I recommend taking profits. In case of weak activity in the area of 1.1986, I recommend not to rush into long positions, but to wait for the update of the intermediate support at 1.1958, or buy EUR/USD on a rebound from the low of 1.1925, counting on an upward correction of 15-20 points within the day. But, before you go long in the euro, remember that you are going against a large bear market, so it is better to bet on short positions.

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

Bears need to defend resistance at 1.2027. Forming a false breakout there in the morning will be an excellent signal to open short positions in continuation of the downward trend that formed after the Fed's decision on monetary policy. But a much more important task is to break through the low of 1.1986, which is where the euro stopped falling yesterday. A breakthrough and test of this area from the bottom up can create a good signal to open short positions in hopes that it would fall to new lows at 1.1958 and 1.1925, where I recommend taking profits. Weak data on inflation in the euro area could be a catalyst for this movement. If the bears are not active in the 1.2027 area today, then I recommend postponing short positions until the resistance test at 1.2063, where you can immediately sell the pair on a rebound, counting on a downward correction of 15-20 points. There are moving averages that play on the side of the bears right above this level.

The Commitment of Traders (COT) report June 8 shows that both long and short positions decreased. This indicated profit taking and traders leaving the market ahead of the European Central Bank's important meeting, following which there were no changes in monetary policy. Many were worried about what would become of the bond purchase program, but it remained unchanged, which did not allow the bulls to maintain control of the market. The pair is now at risk of significantly adjusting its positions ahead of an important Federal Reserve meeting, the results of which will set the market's direction for the next few weeks. The dollar can only hope that this summer the Fed will start talking in all seriousness 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 indicated that long non-commercial positions declined from 237,360 to 232,103, while short non-commercial positions also dropped from 128,038 to 124,890. The more the European currency falls, the more interest it will attract, since the eurozone economy will demonstrate excellent growth rates in the summer, which will certainly affect the prospects for its recovery after the coronavirus pandemic. The total non-commercial net position declined from 109,322 to 107,213. The weekly closing price also declined from 1.22326 to 1.21907.

Indicator signals:

Trading is carried out below 30 and 50 moving averages, which indicates a bearish market.

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

In case of an upward correction from the pair, the average border of the indicator in the area of 1.2050 will act as resistance.

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.