24.12.202108:42 Forex Analysis & Reviews: EUR/USD: plan for the European session on December 24. COT reports. Bulls bought back all of the euro's fall from yesterday

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

Several excellent signals to enter the market were formed yesterday. Let's take a look at the 5 minute chart and understand the entry points. In my morning forecast, I drew attention to the 1.1324 level and advised you to make decisions on entering the market. Against the background of the lack of fundamental statistics and new bulls who regret opening long positions at current highs, the euro slightly dipped. But there was also no one who could offer something for the resumption of the bullish movement from the level of 1.1324. As a result, no signals for entering the market were formed, since after the breakdown of 1.1324, the reverse test of this level did not take place. In my forecast for the second half of the day, I advised to open short positions only after forming a false breakout in the 1.1328 area, which happened. As a result, the euro plunged down 30 points to around 1.1294. The formation of a false breakout there brought back traders who were willing to buy EUR/USD and also led to a good entry point into long positions - the growth was about 30 points.

Today there are no important statistics for the euro area and many markets are closed on Christmas Eve, so volatility and trading volume are expected to be extremely low. The technical picture has not changed much compared to yesterday, so it is best to act by analogy, relying only on new levels. At the moment, bulls need to make every effort to protect 1.1318, and only the formation of a false breakout at this level is a signal to buy the euro, hoping to recover to a new resistance at 1.1341, above which there is a fairly large number of bears' stop orders. Surpassing this level is also an important task, and a reverse test from top to bottom will open the opportunity for growth to the area of new levels: 1.1358 and 1.1381, where I recommend taking profits. The 1.1415 level is a more distant target. If the pair declines during the European session and the bulls are not active at 1.1318, and there are also moving averages playing on the bulls' side, it is best to postpone long positions until the larger support at 1.1292, where the major players were the most active in yesterday. I also advise you to open long positions there when a false breakout is formed. The bulls' last hope to keep the pair in the upward correction channel will be the 1.1265 low, from which one can open long positions immediately on a rebound, counting on an upward correction of 20-25 points within the day.

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

The bears lost the battle for the 13th figure again and now it is necessary to think in the area of 1.1341. The main task for the first half of the day is to protect this resistance. Considering that there are no important statistics today, it is quite possible that the bears will be able to do this. However, the low trading volume on Christmas Eve could contain volatility at low levels, leading to conflicting market entry signals. Only the formation of a false breakout at 1.1341 can create the first entry point to short positions while expecting a return of pressure on the pair and a decline to the 1.1318 area, where the moving averages pass. A very active struggle will unfold for this level. A breakdown and a test from the bottom up of this range will lead to another signal to open short positions with the prospect of pulling down the pair to a large support level of 1.1292. Surpassing this level will take down a number of stop orders and cause a larger fall in EUR/USD with renewed lows: 1.1265 and 1.1246, where I recommend taking profits. If the euro grows and the bears are not active at 1.1341, it is best not to rush to sell. The optimal scenario will be short positions when a false breakout is formed around 1.1358. It is possible to sell EUR/USD immediately on a rebound from the 1.1381 high, or even higher - in the 1.1415 area, counting on a downward correction of 15-20 points.

I recommend for review:

The Commitment of Traders (COT) report for December 14 revealed that both short and long positions decreased, but the latter decreased slightly more, which led to an increase in the negative delta value. However, it should be noted that this data does not include the results of the meeting of the Federal Reserve and the European Central Bank. But if you look at the overall picture as a whole, trading in the horizontal channel is still preserved and even the meetings of the central banks did not make it possible to decide the pair's succeeding direction. Buyers of risky assets, and now we are talking about the euro, are in no hurry to build up long positions even after the ECB announced that it plans to fully complete its emergency bond purchase program as early as next March - this indicates a change in the bank's policy towards tightening it. On the other hand, the Fed is already planning to raise interest rates by this time, which makes the US dollar more attractive. However, the uncertainty with the new strain of the coronavirus Omicron continues to scare off market participants from active actions: no one wants to buy an overbought dollar, but the cheap euro is not yet a very attractive instrument either. The COT report indicated that long non-commercial positions fell from 194,869 to 189,530, while short non-commercial positions fell from 203,168 to 201,409. This suggests that traders are taking a wait-and-see attitude amid all the uncertainty. with the global economy. At the end of the week, the total non-commercial net position increased its negative value from -8 299 to 11 879. The weekly closing price, due to the horizontal channel, did not change at all - 1.1283 against 1.1283 a week earlier.

Indicator signals:

Trading is carried out just above the 30 and 50 daily moving averages, which indicates the bulls' attempt to continue the euro's growth.

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 a decline, support will be provided by the lower border of the indicator in the area of 1.1300. A breakout of the upper border of the indicator in the area of 1.1341 will lead to a new will of the euro growth.

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.