EUR/USD trading plan for European session on June 30, 2023. COT report and overview of previous trades. Strong US GDP report
June 30, 2023 9:22 am
Yesterday, there were no entry points. Now, let’s look at the 5-minute chart and figure out what actually happened. In the first half of the day, it was not possible to reach the levels I mentioned due to low volatility. During the US session, after the pair sharply fell that lasted about half an hour, it quickly came to a halt. Therefore, we also couldn’t obtain clear market entry signals.
For long positions on EUR/USD:
US GDP surprised yesterday after gross domestic product was revised up (to 2.0%) from a previously reported 1.3% growth rate. But today we are much more interested in inflation in the euro area, signs of growth could quickly turn everything upside down. A high core CPI is likely to send the euro higher as it will lead to further interest rate hikes and a pause in September is out of the question. In the meantime, before the data is out, the focus will shift to German labor market reports that might cause the pair to drop if unemployment is up. I plan to enter the market only on a fall and a false breakout of the support level of 1.0855. This will give a buy signal that could help the pair grow to the resistance level of 1.0900, which is a big trigger. This is in line with the bearish moving averages. Only another sharp jump in inflation in the eurozone could boost a bullish bias for the euro. A breakout and a downward test of 1.0900 may bolster demand for the euro. so, the pair is likely to hit a high of 1.0940. A more distant target will be the 1.0975 level where I recommend locking in profits.
If EUR/USD declines and bulls fail to protect 1.0855, which may be due to weak Germany and eurozone reports, the pressure on EUR/USD will increase. Therefore, only a false breakout of the support level of 1.0816 will create new entry points into long positions. You could buy EUR/USD at a bounce from 1.0777, keeping in mind an upward intraday correction of 30-35 pips.
For short positions on EUR/USD:
Bears managed to take the upper hand yesterday after a strong US GDP report and data revealing a sharp drop in jobless claims. However, it would be better to sell the euro on an uptrend, which might happen after the inflation report. In that case, I plan to go short only if bears protect the resistance level of 1.0900, formed based on yesterday’s outcomes. A false breakout is likely to give a sell signal that could push EUR/USD to the support level of 1.0855. If so, its breakout is sure to occur soon. Consolidation below this level as well as an upward retest could trigger a fall to 1.0816 where sellers will already face strong levels. A more distant target will be the 1.0777 level where I recommend locking in profits. Testing this area will indicate the formation of a new bearish bias.
If EUR/USD rises during the European session and bears fail to defend 1.0900, which is unlikely at the end of the month, the bulls will close the pair in the sideways channel. In this case, I would advise you to postpone short positions until a false breakout of the resistance level of 1.0940. You could sell EUR/USD at a bounce from the 1.0975 high, keeping in mind a downward intraday correction of 30-35 pips.
COT report:
According to the COT report for June 13, there was a drop in long and short positions. However, this report was released before the Federal Reserve’s decision on interest rates, which remained unchanged in June. This significantly influenced market sentiment. Therefore, one should not pay great attention to the current report. Demand for the euro remained high amid the ECB’s aggressive tightening. In current conditions, buying on dips will be the best medium-term strategy. The COT report shows that non-commercial long positions decreased by 9,922 to 226,138, while non-commercial short positions fell by 3,323 to 74,316. As a result, the total non-commercial net position dropped to 151,822 from 158,224. The weekly closing price rose to 1.0794 from 1.0702.
Indicator signals:
Moving Averages
Trading is carried out below the 30 and 50 daily moving averages, which indicates the possibility of a downward correction.
Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart.
Bollinger Bands
If the pair falls, the lower band of the indicator at 1.0835 will act as support.
Description of indicators:
• A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart;
• A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart;
• MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period;
• Bollinger Bands: 20-day period;
• Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements;
• Long non-commercial positions represent the total number of long positions opened by non-commercial traders;
• Short non-commercial positions represent the total number of short positions opened by non-commercial traders;
• The non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
Yesterday, there were no entry points. Now, let’s look at the 5-minute chart and figure out what actually happened. In the first half of the day, it was not possible to reach the levels I mentioned due to low volatility. During the US session, after the pair sharply fell that lasted about half an hour, it quickly came to a halt. Therefore, we also couldn’t obtain clear market entry signals.
For long positions on EUR/USD:
US GDP surprised yesterday after gross domestic product was revised up (to 2.0%) from a previously reported 1.3% growth rate. But today we are much more interested in inflation in the euro area, signs of growth could quickly turn everything upside down. A high core CPI is likely to send the euro higher as it will lead to further interest rate hikes and a pause in September is out of the question. In the meantime, before the data is out, the focus will shift to German labor market reports that might cause the pair to drop if unemployment is up. I plan to enter the market only on a fall and a false breakout of the support level of 1.0855. This will give a buy signal that could help the pair grow to the resistance level of 1.0900, which is a big trigger. This is in line with the bearish moving averages. Only another sharp jump in inflation in the eurozone could boost a bullish bias for the euro. A breakout and a downward test of 1.0900 may bolster demand for the euro. so, the pair is likely to hit a high of 1.0940. A more distant target will be the 1.0975 level where I recommend locking in profits.
If EUR/USD declines and bulls fail to protect 1.0855, which may be due to weak Germany and eurozone reports, the pressure on EUR/USD will increase. Therefore, only a false breakout of the support level of 1.0816 will create new entry points into long positions. You could buy EUR/USD at a bounce from 1.0777, keeping in mind an upward intraday correction of 30-35 pips.
For short positions on EUR/USD:
Bears managed to take the upper hand yesterday after a strong US GDP report and data revealing a sharp drop in jobless claims. However, it would be better to sell the euro on an uptrend, which might happen after the inflation report. In that case, I plan to go short only if bears protect the resistance level of 1.0900, formed based on yesterday’s outcomes. A false breakout is likely to give a sell signal that could push EUR/USD to the support level of 1.0855. If so, its breakout is sure to occur soon. Consolidation below this level as well as an upward retest could trigger a fall to 1.0816 where sellers will already face strong levels. A more distant target will be the 1.0777 level where I recommend locking in profits. Testing this area will indicate the formation of a new bearish bias.
If EUR/USD rises during the European session and bears fail to defend 1.0900, which is unlikely at the end of the month, the bulls will close the pair in the sideways channel. In this case, I would advise you to postpone short positions until a false breakout of the resistance level of 1.0940. You could sell EUR/USD at a bounce from the 1.0975 high, keeping in mind a downward intraday correction of 30-35 pips.
COT report:
According to the COT report for June 13, there was a drop in long and short positions. However, this report was released before the Federal Reserve’s decision on interest rates, which remained unchanged in June. This significantly influenced market sentiment. Therefore, one should not pay great attention to the current report. Demand for the euro remained high amid the ECB’s aggressive tightening. In current conditions, buying on dips will be the best medium-term strategy. The COT report shows that non-commercial long positions decreased by 9,922 to 226,138, while non-commercial short positions fell by 3,323 to 74,316. As a result, the total non-commercial net position dropped to 151,822 from 158,224. The weekly closing price rose to 1.0794 from 1.0702.
Indicator signals:
Moving Averages
Trading is carried out below the 30 and 50 daily moving averages, which indicates the possibility of a downward correction.
Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart.
Bollinger Bands
If the pair falls, the lower band of the indicator at 1.0835 will act as support.
Description of indicators:
• A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart;
• A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart;
• MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period;
• Bollinger Bands: 20-day period;
• Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements;
• Long non-commercial positions represent the total number of long positions opened by non-commercial traders;
• Short non-commercial positions represent the total number of short positions opened by non-commercial traders;
• The non-commercial net position is the difference between short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
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