17.03.202007:57 Forex Analysis & Reviews: EUR/USD: plan for European session on March 17. Commitment of Traders report. Traders limit Short positions for euro. Euro buyers reluctant to open new deals

To open long positions on EUR/USD:

Yesterday, the euro strengthened against the US dollar. However, major bullish momentum in the pair did not occur after the Federal Reserve cut interest rates. The COT report as of March 10 indicated a sharp reduction in Short positions for the euro, while the number of Long positions did not increase. Traders were cautious to buy the euro amid collapse in the financial and commodity markets. The number of Short nonprofit positions decreased from the level of 238,607 to 166,487 while Long nonprofit positions increased from the level of 151,904 to 153,820. As a result, the non-profit net position has grown significantly from its negative level of -86,703 to -12,667. All this indicates that speculators are changing their forecasts for the euro. Moreover, the market is expected to reverse in the longer term. However, taking into account high volatility and tension caused by the spread of the coronavirus, it is better not to expect the euro to rise significantly anytime soon. At the moment, returning to the level of 1.1158, the price is targeted to form a false breakthrough at this level. As a result, the upward trend is expected to continue and the pair is likely to test the high of 1.1237. If the price breaks through this level, it can rise to the highs of 1.1295 and 1.1344 where it is better to take profit. If the EUR/USD pair falls below the level of 1.1158, it is preferable to open Longs at 1.1063, the lower border of the side channel, only if a false breakdown is formed, or to open buy deals immediately on the rebound from a minimum of 1.0992.

To open short positions on EUR/USD:

Sellers are likely to defend the resistance level of 1.1237. It is preferable to open short positions if there is a false breakthrough at this level. However, the most important task for bears on the first half of the day is to return the pair under the support level of 1.1058. In this case, pressure on the EUR/USD pair is likely to increase and the price can test the level of 1.1063, the lower border of the side channel. As a result, the bearish momentum can return to the market. If the price breaks through the level of 1.1063, it is likely to fall to the new lows of 1.0992 and 1.0957. It is preferable to take profit at this levels. It is better to return to short positions only on the rebound from the highs of 1.1295 and 1.1344 if the pair tests the resistance level of 1.1237 and falls by only 20-30 pips.

Indicator signals:

Moving averages

Trading is in 30 and 50 moving averages, but the demand for the euro remains rather weak.

Bollinger Bands

If the price breaks through the lower border of the indicator near 1.1130, pressure on the euro is likely to increase. If the price rises above the upper border of the indicator at 1.1210, it can lead to a new upward movement in the euro.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The line is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The line is marked in green.
• MACD indicator (Moving Average Convergence/Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands. Period 20
• Non-profit traders are speculators, such as individual traders, hedge funds and large institutions that use the futures market for speculative purposes and meet certain requirements.
• Long nonprofit positions represent the total long open position of nonprofit traders.
• Short nonprofit positions represent the total short open position of nonprofit traders.
• Total non-profit net position is the difference between short and long positions of non-profit traders.