In my morning forecast, I emphasized the level of 1.0755 and planned to make decisions on market entry based on it. Let's take a look at the 5-minute chart and analyze what happened. A decline occurred, but due to very low market volatility, which was about 20 points, we did not reach the test of 1.0755. For this reason, there were no market entry signals. The technical picture remained unchanged for the second half of the day.
To open long positions on EUR/USD, the following is required:
Data on the reduction of industrial production in Germany limited the upside potential of the pair, as all this indicates the persisting issues in the flagship economy of the Eurozone. Ahead of us are quite mediocre U.S. statistics in the form of the trade balance and consumer credit volume. Therefore, I recommend focusing attention on the speeches and interviews of Federal Reserve representatives. Statements from FOMC members Susan M. Collins, Thomas Barkin, and Michelle Bowman are expected. A tendency toward a more accommodative policy will harm the dollar and lead to further growth in risk assets.
As for the strategy for the second half of the day, I will act following the morning forecast: the formation of a false breakout in the area of 1.0755, where moving averages are located, will provide suitable conditions for buying against the trend, expecting further upward correction to around 1.0785 – the upper boundary of the channel. Breaking and updating this range from top to bottom will provide an opportunity to buy with the development of a more powerful upward correction and the prospect of updating 1.0816. The ultimate target will be the maximum at 1.0856, where I will take profit. In case of a decline in EUR/USD and the absence of activity at 1.0755 in the second half of the day, pressure on the pair will return. In this case, I plan to enter the market only after the formation of a false breakout around 1.0725. I will consider opening long positions immediately on the rebound from 1.0696 with the target of an intraday upward correction by 30-35 points.
To open short positions on EUR/USD, the following is required:
Bears attempted to return on weak data but failed to reach even the nearest support at 1.0755. For this reason, it is now better to focus attention on protecting the resistance at 1.0785, the movement toward which may occur at any moment after weak U.S. statistics. Protection and the formation of a false breakout there will indicate the presence of major players in the market, which may lead to a new downward movement of the pair towards 1.0755, thus continuing the development of a new downtrend. Breaking and consolidating below this range, as well as a bottom-up retest, will provide another selling point with the pair collapsing towards 1.0725. The ultimate target will be the minimum at 1.0696, where I will take profit. In case of an upward movement of EUR/USD in the second half of the day and the absence of bears at 1.0785, buyers will continue to play their positions. In this case, I will postpone selling until testing the next resistance at 1.0816. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately on the rebound from 1.0856 with the target of a downward correction by 30-35 points.
Indicator signals:
Moving averages
Trading is carried out above the 30 and 50-day moving averages, indicating further correction of the pair.
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 classic daily moving averages on the daily chart D1.
Bollinger Bands
In case of a decline, the lower boundary of the indicator around 1.0755 will act as support.
Indicator Descriptions:
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