In my morning forecast, I highlighted the 1.1300 level and planned to base my entry decisions around it. Let's take a look at the 5-minute chart to see what happened. A decline and the formation of a false breakout around 1.1300 led to an entry point for buying the euro, which resulted in a 35-point rise in the pair. The technical picture has not been revised for the second half of the day.

To Open Long Positions on EUR/USD:

Weak labor market data from Germany and a rather soft GDP report from France had little impact on the euro in the first half of the day. In the second half, we'll hear from FOMC member Neel Kashkari and get the Richmond Fed Manufacturing Index. The key event will be the release of the FOMC meeting minutes. If the minutes are dovish, pressure on the dollar may increase, leading to further EUR/USD recovery. If U.S. data is strong, the euro is likely to resume its decline, making it better to delay buying.

Focus will remain on defending the 1.1300 support, which was already tested earlier. A false breakout at this level will provide a signal to buy EUR/USD with a target of returning to 1.1336. A breakout and retest of this range will confirm a correct entry point, with the next target at the 1.1374 area. The final target will be 1.1416, where I plan to take profits.

If EUR/USD declines and there is no activity around 1.1300, pressure on the pair will increase, potentially pushing it toward 1.1259. Only after a false breakout forms at that level do I plan to buy the euro. I also plan to open long positions on a rebound from 1.1221, aiming for an intraday correction of 30–35 points.

To Open Short Positions on EUR/USD:

Euro sellers didn't show much strength but managed to defend the 1.1336 level, keeping the pair from rising further. In the event of weak U.S. data followed by a bullish market reaction, it's best to wait for another false breakout at 1.1336. Only then will it be a valid signal to enter short positions against the trend, targeting 1.1300.

A breakout and consolidation below this level will be a good scenario for selling, targeting 1.1259. The final target will be 1.1221, where I plan to take profits. If EUR/USD rises in the second half of the day and bears remain inactive near 1.1336—where the moving averages are positioned in their favor—buyers may push the pair up to 1.1374. I plan to sell only after a failed consolidation there. I'll open short positions on a rebound from 1.1416, aiming for a 30–35 point downward correction.

COT (Commitment of Traders) Report for May 20:

The report showed an increase in short positions and a decrease in long positions. Given that EU authorities are actively pursuing a trade agreement with the U.S.—even postponing higher tariffs until July—there is a decent chance of euro strengthening in the near term. Add to that the Federal Reserve's dovish stance, and the dollar's upside prospects diminish further.

According to the COT report, long non-commercial positions declined by 3,507 to 206,042, while short positions rose by 6,814 to 131,589. As a result, the gap between long and short positions narrowed by 4,489.

Indicator Signals:

Moving Averages Trading is below the 30- and 50-day moving averages, indicating a continued decline in the pair.Note: The author considers moving averages on the H1 chart, which may differ from the classical daily moving averages on the D1 chart.

Bollinger Bands If the pair falls, the lower boundary of the indicator around 1.1300 will act as support.

Indicator Descriptions:

• Moving Average (MA) – Smooths out price volatility and identifies trends. Period 50 (yellow), Period 30 (green).
• MACD (Moving Average Convergence/Divergence) – EMA 12 (fast), EMA 26 (slow), SMA 9 (signal).
• 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 criteria.
• Long non-commercial positions – Total long open positions held by non-commercial traders.
• Short non-commercial positions – Total short open positions held by non-commercial traders.
• Net non-commercial position – Difference between long and short positions of non-commercial traders.