I paid close attention to the 1.0321 level in my morning forecast and suggested making entry decisions there. Let's examine the 5-minute chart to determine what transpired there. Weekends and vacations are over, and yesterday, traders who had been waiting began selling off hazardous assets. The fast decline of the euro and the breach of the nearest support and resistance levels prevented me from entering the market, as there were no reversal tests to confirm the entry point into short positions. Only a break and a reversal test of 1.0321 from the bottom up resulted in a sell signal, precipitating a nearly 40-point decline in the euro. There has been a shift in the technical situation in the afternoon. What were the places of entry for the pound?

To initiate long positions on the EURUSD, you must:

The probability of a recession in the United States has dramatically grown and now exceeds 40 percent. All of this indicates the dollar's continued expansion as a safe-haven asset. Indicating the continuation of the formation of a downward trend, the fact that bears today breached all technical levels that purchasers could only rely on suggests the continuation of the formation of a downward trend. The data on the volume of industrial orders in the United States that is slated for release in the second half of the day may cause a bigger decline in the pair. In this event, the bulls' major objective will be to defend the nearest support level of 1.0282, which was created towards the end of the first half of the trading session. Only after creating another false breakdown at this level will it be possible to begin long positions, anticipating a short upward correction to reclaim the area of 1.0341. Large sellers will begin to act there to keep up with the bear market. Only after a breakout and a top-down test of 1.0341 will the bulls have a favorable entry position to purchase, which will deliver a significant blow to the bears' stop orders and allow the pair to break out to a higher resistance level of 1.0384. The farthest aim is the area of 1.0437. However, there are currently no conditions for such a substantial increase. With the possibility of a EUR/USD decrease and the absence of buyers at 1.0282, which is more plausible, the situation will only worsen. In this instance, I would advise against rushing into the market: the best opportunity for initiating long positions would be a fake breakdown in the 1.0240 support level. I advise purchasing EUR/USD immediately for a comeback only from the level of 1.0194, or even lower – around 1.0155, with the aim of an upward corrective of 30-35 points within a day.

To establish short positions on the EURUSD, you must:

The bears seized control of the entire market and successfully attempted to breach the yearly lows. It will likely be a technical correction if the euro climbs in the afternoon following a bad US economic data release. The creation of a false breakdown around 1.0341 constitutes a signal to begin short positions with the expectation of a further decline of the pair into the area of 1.0282, representing the nearest support. A breakdown and consolidation below this range, as well as a reverse test from the bottom up, analogous to what I have discussed above, will result in an extra sell signal with the destruction of buyers' stop orders and a new regular pre-pandemic annual minimum in the region of 1.0240. We should anticipate a collapse in this area with the update of 1.0194, when I advocate locking in profits, following a slight rebound up and the lack of a significant battle. A more distant aim will be the area of 1.0155. If there is a rise in EUR/USD during the American session and the absence of bears at 1.0341, nothing catastrophic will occur for sellers. However, I recommend delaying short positions until the test of 1.0384, when the moving averages favoring bears are slightly higher. With the construction of a false breakout, there will be a new beginning point for continuing the bearish trend. You can sell EUR/USD immediately on a rebound from the maximum of 1.0437 or even higher – around 1.0493 with the aim of a downward correction of 30-35 points.

The COT report (Commitment of Traders) for June 21 revealed a decline in both long and short positions, which contributed to establishing a wider negative delta, suggesting the retention of a bearish mood. Last week, Federal Reserve Chairman Jerome Powell spoke, who confirmed his firm position on further hiking interest rates in the United States with the hope of fighting the highest inflation in the last 40 years. In addition, the European Central Bank wants to begin raising interest rates next month, limiting the dollar's upside potential versus the euro. Given how risky assets are oversold against the dollar, we can expect a further recovery of the euro after the tightening monetary policy cycle in the eurozone. The COT data showed that long non-commercial positions declined by 11,432 to 195,554, while short non-commercial positions decreased by 1,845 to 211,159. The cheap exchange rate of the euro makes it more tempting, but traders can always return to purchasing US dollars at any time. It is due to the continuing high inflation and central banks' need to adopt a more aggressive stance. The total non-commercial net position at the end of the week remained negative and declined from -6,018 to -15,605. The price at the end of the week increased from 1.0481 to 1.0598.

• 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 use the futures market for speculative purposes and to 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 the short and long positions of non-commercial traders.