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

The euro continued to strengthen its positions against the dollar on Friday, reaching new weekly highs. It is likely that buyers were positively influenced by US President Donald Trump's decision on a new package of economic assistance measures. As far as deals are concerned, this was pretty difficult. We did not wait for a signal to open long positions in the morning. Selling on the rebound from the 1.1828 level did not bring anything good either.

Before talking about today's prospects for the pair's movement, let's take a look at the situation on the futures market, which tells us about a declining number of those who wish to buy euros in October, especially against the backdrop of the approaching US elections. The Commitment of Traders (COT) report for October 6 showed a reduction in long positions and an increase in short positions, which led to an even greater decrease in the delta. Buyers of risky assets believe in sustaining the bull market, but prefer to proceed with caution, as there is no good news about the eurozone and the pace of economic recovery so far. Thus, long non-commercial positions decreased from 241,967 to 231,369, while short non-commercial positions increased from 53,851 to 57,061. The total non-commercial net position decreased to 174,308, against 188,116 a week earlier. which indicates a wait-and-see attitude of new players. However, bullish sentiments for the euro remain rather high in the medium term. The more the euro falls against the US dollar, the more attractive it is for new investors.

We can talk about the euro's succeeding growth only when we have formed a breakout and have settled above the resistance of 1.1828, which will open a direct road to new highs in the 1.1868 and 1.1915 areas, where I recommend taking profits. However, expecting such a strong bullish momentum early in the week is unlikely, since today, the US is celebrating Columbus day and many markets will be closed for the weekend, which will affect trading volume and volatility. Therefore, in case the euro does not grow above 1.1828 in the first half of the day, I recommend leaving long positions, since trading may remain in a narrow horizontal channel. A more optimal scenario for buying the euro is when support is tested at 1.1783, where the moving averages also pass, playing on the side of buyers. You can open long positions from this level immediately on a rebound, counting on the continuation of the bull market.

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

All the bears need is a false breakout in the 1.1828 resistance area, which they defended at the end of last week. In this scenario, together with the absence of important fundamental statistics on the eurozone countries, we can expect the euro to be under pressure in order to update the low around 1.1783. However, settling below this level forms a new entry point for short positions, and the next target will be the 1.1737 area, which is where I recommend taking profits. In case bears aren't active in the 1.1828 area, it is best not to rush to sell against the new upward trend, instead we should wait until a larger resistance at 1.1868 has been updated, from where you can sell the euro immediately on a rebound, counting on a 20-30 point correction within the day.

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the euro's succeeding growth.

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 classic daily moving averages on the D1 daily chart.

Bollinger Bands

Volatility is decreasing amid the US holiday. A breakout of the lower border of the indicator around 1.1795 will increase pressure on the euro. A breakout of the upper border of the indicator in the 1.1830 area will lead to a sharper rise in the euro.

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.