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23.06.202116:49 Forex Analysis & Reviews: EUR/USD: plan for the US session on June 23 (analysis of morning trades).

To open long positions on EURUSD, you need to:

In my morning forecast, I paid attention to the level of 1.1950 and recommended that you decide to enter the market from it. Let's look at the 5-minute chart and talk about what happened. Good data on the eurozone PMI indices did not allow the pair to show growth in the continuation of the upward correction. Buyers are trying to break above the resistance of 1.1950. However, they are not very good at it yet. The formation of a false breakout in the area of 1.1950 led to the formation of a signal to open short positions in the expectation of a downward correction of the pair.

Exchange Rates 23.06.2021 analysis

For the second half of the day, the technical picture has not changed in any way, and the bulls need to make more efforts to break through the resistance of 1.1950. During the US session, the indices of manufacturing activity and services in the US will be published, which may support the dollar. The main task of buyers for the second half of the day will be a breakout and a test of the level of 1.1950 from top to bottom, which can form a signal to open long positions to restore the pair to a larger resistance of 1.2000, where I recommend taking the profits. The next target will be the area of 1.2033. In the case of good data on the US and a decline in the euro in the second half of the day, I recommend not to rush to buy. The optimal scenario will be long positions, provided that a false breakout is formed in the support area of 1.1898. In the scenario of weak buyer activity in this range, I advise you to wait for the update of the next support at 1.1852 and buy EUR/USD for a rebound with the expectation of an upward correction of 15-20 points within the day.

To open short positions on EURUSD, you need to:

As long as the trade is conducted below the resistance of 1.1950, the pressure on the euro will continue. The next formation of a false breakout in the second half of the day during the publication of reports on US PMI indices will lead to the formation of a signal to open short positions in the expectation of resuming the downward trend formed in the middle of last week. But the more important task for sellers is to break through the support of 1.1898. The breakdown and test of this area from the bottom up on the volume form an additional signal to open short positions with the aim of further falling of EUR/USD to the lows of 1.1852 and 1.1805, where I recommend taking the profit. If the bulls break through the resistance of 1.1950 in the second half of the day, I recommend postponing short positions until the test of a new high of 1.2000, where you can immediately sell the pair for a rebound in the expectation of a downward correction of 15-20 points.

Exchange Rates 23.06.2021 analysis

Let me remind you that there were significant changes in the COT report (Commitment of Traders) for June 15. Both short and long positions sharply decreased. However, the data do not take into account the decision of the Federal Reserve System on interest rates, so I do not recommend much emphasis on these indicators now. Let me remind you that last week the euro resumed its significant fall against the US dollar after the first hints of the Fed to raise interest rates earlier in 2023. It also suggests that the Central Bank may soon begin to wind down its bond-buying program, which will strengthen the US dollar's position on the global stage even more. Inflation data, which has recently been released for the US and the euro area, suggests that the European Central Bank will not rush to change its policy yet, weakening the euro's position. Most likely, the trend for the strengthening of the US dollar will continue this week. The COT report shows that long non-profit positions fell from the level of 232,103 to 210,816, while short non-profit positions fell from the level of 124,890 to the level of 92,630. It should be understood that the lower the European currency falls, the more interest it will arouse among traders since the eurozone economy is aimed at strong growth in the summer, which will necessarily affect the prospects for its recovery after the coronavirus pandemic. The total non-profit net position increased from 107,213 to 118,186. The weekly closing price fell from the level of 1.2190 to the level of 1.2121.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which threatens the pair's downward trend.

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

Bollinger Bands

A break of the upper limit of the indicator in the area of 1.1950 will lead to a new wave of euro growth. A break of the lower limit in the area of 1.1925 will increase the pressure on the pair.

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 speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet specific 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 the short and long positions of non-commercial 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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