11.06.202006:13 Forex Analysis & Reviews: EUR/USD: plan for the European session on June 11 (analysis of yesterday's deals). Bulls ran out of steam and failed to continue euro's growth. COT report. Fed policy remains virtually unchanged

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

Yesterday's news on inflation in the US, which fell more than many expected, as well as the Federal Reserve's decision to leave interest rates unchanged and only slightly adjust the bond purchase program, did not allow euro buyers to continue the upward trend that we have seen since the beginning of May. If you look at the 5-minute chart, you can see that in the afternoon, even before the Fed announced its decision, the bears formed a signal to sell the euro, making a false breakout in the resistance area of 1.1379. Given the pair's downward movement after the central bank announced its decision, the profit reached more than 50 points, which is pretty good in the current market. I also drew attention to sales after an update of resistance at 1.1422, the test of which took place after Fed Chairman Jerome Powell's speech, which also made it possible to take more than three dozen points from the market. As for the current technical picture, by and large, nothing has changed compared to yesterday. Bulls still need to break above the resistance 1.1403, consolidating on which will strengthen the upward momentum and lead to updating highs 1.1462 and 1.1514, where I recommend taking profits. An equally important task for euro buyers is to protect support 1.1325, where forming a false breakout will be a signal to open long positions. Otherwise, given the fact that the bulishl market is gradually coming to an end, it is best to count on purchases on a rebound from a large low of 1.1244 in anticipation of a correction of 30-40 points at the end of the day. You also need to remember that in the Commitment of Traders (COT) reports for June 2, a decrease was noted in both long and short positions, however, sellers left the market more, which may maintain a bullish momentum until new reports are released. Reduction of short non-profit positions occurred from the level of 99,812, to the level of 93,172, while long non-profit positions slightly decreased, from the level of 175,034 to the level of 174,412. As a result, the positive non-profit net position increased again and reached 81,240 , against 75,222, which indicates an increase in interest in buying risky assets even at current prices high enough for the market.

Exchange Rates 11.06.2020 analysis

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

As for the short positions in the euro, there was a chance for a more powerful downward correction, following the Fed's statements. The bears need to wait for a false breakout to form in the resistance area of 1.1403 in the morning, which will be a signal to open short positions in the pair, however, many traders will concentrate on the Eurogroup meeting, which might discuss the assistance plan proposed by the European Commission worth 750 billion euros, which will lead to another wave of EUR/USD growth. In this scenario, it is best to count on short positions after updating the highs of 1.1462 and 1.1514 while aiming for a downward correction of 30-40 points within the day. However, it is likely that traders will disregard the meeting and focus on data on US producer prices and the labor market. In case of positive reports, demand for the US dollar may return. In this case, the bears' task is to break through and consolidate below the support of 1.1325, which will increase pressure on EUR/USD and lead to a return to the area of the lower border of the side channel of 1.1244, where I recommend taking profits. The entire upward trend formed on May 25 will depend on the breakout of this level.

Exchange Rates 11.06.2020 analysis

Signals of indicators:

Moving averages

Trading is carried out in the region of 30 and 50 moving average, which indicates the possible completion of the uptrend in the pair.

Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differs from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger bands

If the pair falls in the morning, support will be provided by the lower border of the indicator in the region of 1.12354, a break through of which will increase pressure on the euro. Growth above the upper border of the indicator in the area of 1.1403 will lead to a larger bullish momentum.

Description of indicators

  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
  • Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
  • MACD indicator (Moving Average Convergence / Divergence - Moving Average Convergence / Divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
  • Bollinger Bands (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.
  • The total non-profit net position is the difference between short and long positions of non-profit traders.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Miroslaw Bawulski,
Analytical expert
InstaForex Group © 2007-2021
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