In my morning forecast, I highlighted the 1.1407 level and planned to make market entry decisions based on it. Let's look at the 5-minute chart and see what happened. There was a decline toward 1.1407, but no false breakout was formed. The technical picture was not revised for the second half of the day.

Requirements for Opening Long Positions on EUR/USD:

Despite the positive Eurozone GDP data, which was revised upward, traders preferred to stay on the sidelines. In the second half of the day, we await figures on nonfarm payrolls, the unemployment rate, and average hourly earnings in the U.S. Only very strong readings will renew demand for the dollar and put pressure on the euro. In case of a decline in the pair, the focus will shift to defending the 1.1407 support. A false breakout there, as previously discussed, will be a signal to buy EUR/USD in hopes of updating the high around 1.1453. A breakout and retest of this range would confirm the correct entry point with a target of 1.1490. The ultimate target would be 1.1530, where I would take profit.

If EUR/USD declines and there's no activity around 1.1407, pressure on the pair will quickly increase, leading to a larger drop. In that case, bears could reach 1.1361. I would only look to buy after a false breakout there. Alternatively, I plan to open long positions on a rebound from 1.1314, aiming for an intraday correction of 30–35 points.

Requirements for Opening Short Positions on EUR/USD:

Sellers attempted to push lower during the first half of the day but failed to break below 1.1407. It's best to wait for U.S. data and the market reaction before making decisions. A false breakout around the 1.1453 resistance would be a signal to short with a target at 1.1407, where the moving averages favor the bulls. A breakout and consolidation below this range would be a suitable selling scenario with a move toward 1.1361. The final target would be 1.1314, where I would take profit.

If EUR/USD rises in the second half of the day and bears show no activity around 1.1453, buyers could drive the pair higher, updating the 1.1490 monthly high. I would only sell after a failed breakout there. Alternatively, I plan to open short positions on a rebound from 1.1530, targeting a downward correction of 30–35 points.

The COT (Commitment of Traders) report dated May 27 showed a decrease in both long and short positions. However, it is clear that the advantage remains on the buyers' side. Traders are preparing for the next ECB meeting, where another rate cut is expected. Many economists believe this will be the last cut before a significant pause in the cycle, which could support the euro in the short term. Add to that the GDP report and U.S. labor market data, and the week promises to be quite volatile. According to the COT report, long non-commercial positions fell by 1,716 to 204,326, while short non-commercial positions dropped by 6,737 to 124,852, narrowing the gap between long and short positions by 2,778.

Indicator Signals:

Moving Averages

Trading is occurring around the 30- and 50-period moving averages, indicating market uncertainty.

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

Bollinger Bands

In case of a decline, the lower band around 1.1421 will serve as support.

Indicator Descriptions:

• Moving Average (determines the current trend by smoothing volatility and noise), Period – 50, marked in yellow on the chart;
• Moving Average, Period – 30, marked in green on the chart;
• MACD Indicator (Moving Average Convergence/Divergence) – Fast EMA: 12-period, Slow EMA: 26-period, SMA: 9-period;
• Bollinger Bands, Period – 20;
• Non-commercial traders – Speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting certain requirements;
• Long non-commercial positions represent the total long open positions of non-commercial traders;
• Short non-commercial positions represent the total short open positions of non-commercial traders;
• Net non-commercial position is the difference between the short and long positions of non-commercial traders.