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

Last Friday, the breakthrough of another weekly low triggered a sharp sell-off of the European currency further along the downward trend formed in early September this year. Expectations of changes in the Federal Reserve's monetary policy are boosting demand for the US dollar, which may show a larger upward trend in mid-fall this year.

No important news this morning, but attention will be drawn to the report on the German producer price index, whose growth in August, above economists' forecasts, may help stop the downward trend in the European currency. If the data turns out to be worse than economists' forecasts, it is unlikely that the EUR/USD bulls will have enough strength to defend the 1.1709 support. Forming a false breakout there generates a signal to open long positions against the trend in hopes of an upward correction to the first resistance of 1.1733. A breakthrough of this range and its reverse test from top to bottom creates a good entry point into long positions in continuation of the euro's growth with the renewal of the 1.1756 high, where I recommend taking profits. Moving averages are just below this area, which will limit the pair's upward potential. In case EUR/USD falls in the first half of the day and traders are not active around 1.1709, you can open long positions in EUR/USD after a false breakout in the 1.1686 area, but I advise you to buy EUR/USD immediately on a rebound only at the 1.1666 low, or even lower - in the area of 1.1628 based on an upward correction of 15-20 points within the day.

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

Bears will try to control the market and be active in every possible way during an upward correction in the pair. Fundamental data on Germany and the speech of European Central Bank executive board member Isabel Schnabel are unlikely to seriously harm the downward trend. Weak inflation data, on the contrary, will help the bears to protect the resistance at 1.1733. But only a false breakout on it can lead to forming the first entry point to short positions in hopes that the pair would fall within the day. The next target will be a breakthrough and consolidation below the support at 1.1709. A reverse test of this level from the bottom up will return pressure to the pair and create another signal to sell the euro with a renewal of the 1.1686 low. The next target will be the area of 1.1666, where I recommend taking profits. If EUR/USD rises in the first half of the day and there are no bears at 1.1733, it is best to postpone selling until the test of the larger resistance at 1.1756. I advise you to sell the pair immediately on a rebound counting on a downward correction of 15-20 points only from a new high of 1.1787.

Indicator signals:

Moving averages

Trading is carried out below 30 and 50 moving averages, which indicates a further decline in the euro along the trend.

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 the event of a decline, the lower border of the indicator in the area of 1.1686 will act as a support. Growth will be limited in the area of the middle border of the indicator 1.1735.

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. Q
• 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.