EUR/USD: trading plan for European session on November 3. EUR extending its uptrend
November 3, 2023 10:23 am
Yesterday, EUR/USD generated several signals to enter the market. Now, let’s look at the 5-minute chart and try to figure out what happened there. In my previous forecast, I told you to take notice of 1.0604 and recommended making decisions on entering the market from there. The growth and a false breakout at this level produced a sell signal against the development of the bullish trend. Indeed, there was a downward movement, but after a correction of 10 pips, buyers returned and continued to push the euro up. In the second half of the day, only a return below the level of 1.0643 and a reverse test made it possible to find out an entry point into short positions. As a result, EUR/USD moved down by 35 pips.
What is needed to open long positions on EUR/USD
Today in the first half of the day, there is nothing in the economic calendar, except data on the eurozone’s unemployment rate. So, traders will probably take a wait-and-see approach before the release of the crucial report on the American labor market. We will talk about it in more detail in the forecast for the second half of the day. In case EUR/USD make an attempt to return pressure, only the formation of a false breakout in the area of the nearest support at 1.0616, where the moving averages also pass, can generate a good entry point into long positions in the hope of a further uptrend and a test of the resistance 1.0642, formed yesterday. A breakout and update from top to bottom of this range in light of news about a decrease in unemployment in the eurozone will give a chance for a breakout to 1.0667. The highest target will be determined at around 1.0693, where I will take profits. If EUR/USD declines and there is no activity at 1.0616 in the first half of the day, nothing bad will happen, but selling pressure on the euro will increase, which will lead to a larger movement down to 1.0593. The price might get stuck in a sideways channel. In this case, only a false breakout forms a signal to enter the market. I will open long positions immediately on a dip from 1.0569, bearing in mind an upward correction of 30-35 pips within the day.
What is needed to open short positions on EUR/USD
The sellers took advantage of the strong rise in the euro, having a fairly serious impact on the instrument in the afternoon. It is unlikely that today we can expect serious changes in the balance of trading forces before the release of US nonfarm payrolls, but at the same time, buyers may try to gain a foothold above 1.0642. The bears’ task will be to protect this level. A false breakout at 1.0642 in the first half of the day will give a good signal to sell with a movement down to support at 1.0616, where the moving averages are passing, playing on the side of the buyers. After breaking through and consolidating below this range, as well as a reverse test from bottom to top, I expect to receive another sell signal with a downward target at 1.0593. The lowest target will be at least 1.0569, where I will take profits. If EUR/USD moves up during the European session and there are no bears at 1.0642, the buyers will certainly try to reach yesterday’s high. With this development of events, I will postpone short positions until resistance at 1.0667. You can sell there, but only on the condition of unsuccessful consolidation. I will open short positions immediately on a rebound from the high of 1.0693, reckoning an intraday downward correction of 30-35 pips.
The COT (Commitment of Traders) report for October 24 showed an increase in long positions and a decline in short ones. Considering that everyone expected the European Central Bank to stop the cycle of raising interest rates, its decision did not greatly affect the balance of trading forces in the market. As we can see, it even slightly helped the euro regain its position against the US dollar. The Federal Reserve has also held a policy meeting this week and made a similar decision to keep monetary policy unchanged. But given the US data, market participants wanted to find out clues from the FOMC members as to the possibility of the final rate hike in December this year. Such prospects could be bullish for the US dollar. The COT report indicated that long non-commercial positions increased by 1,256 to the level of 215,569, while short non-commercial positions fell by 1,587 to the level of 130,316. As a result, the spread between long and short positions narrowed by 1,350. EUR/USD closed last Friday higher at 1.0613 against 1.0596 a week ago, which confirms the upward correction of the euro.
Indicators’ signals
Moving averages
The instrument is trading above the 30 and 50-day moving averages. It indicates a further uptrend in EUR/USD.
Note: The period and prices of the moving averages are considered by the analyst on the 1-hour chart and differ from the general definition of classic daily moving averages on the daily chart.
Bollinger Bands
In case EUR/USD goes down, the indicator’s lower border at about 1.0605 will act as support.
Description of indicators
Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked yellow on the chart.
Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked 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.
The material has been provided by InstaForex Company – www.instaforex.com
Yesterday, EUR/USD generated several signals to enter the market. Now, let’s look at the 5-minute chart and try to figure out what happened there. In my previous forecast, I told you to take notice of 1.0604 and recommended making decisions on entering the market from there. The growth and a false breakout at this level produced a sell signal against the development of the bullish trend. Indeed, there was a downward movement, but after a correction of 10 pips, buyers returned and continued to push the euro up. In the second half of the day, only a return below the level of 1.0643 and a reverse test made it possible to find out an entry point into short positions. As a result, EUR/USD moved down by 35 pips.
What is needed to open long positions on EUR/USD
Today in the first half of the day, there is nothing in the economic calendar, except data on the eurozone’s unemployment rate. So, traders will probably take a wait-and-see approach before the release of the crucial report on the American labor market. We will talk about it in more detail in the forecast for the second half of the day. In case EUR/USD make an attempt to return pressure, only the formation of a false breakout in the area of the nearest support at 1.0616, where the moving averages also pass, can generate a good entry point into long positions in the hope of a further uptrend and a test of the resistance 1.0642, formed yesterday. A breakout and update from top to bottom of this range in light of news about a decrease in unemployment in the eurozone will give a chance for a breakout to 1.0667. The highest target will be determined at around 1.0693, where I will take profits. If EUR/USD declines and there is no activity at 1.0616 in the first half of the day, nothing bad will happen, but selling pressure on the euro will increase, which will lead to a larger movement down to 1.0593. The price might get stuck in a sideways channel. In this case, only a false breakout forms a signal to enter the market. I will open long positions immediately on a dip from 1.0569, bearing in mind an upward correction of 30-35 pips within the day.
What is needed to open short positions on EUR/USD
The sellers took advantage of the strong rise in the euro, having a fairly serious impact on the instrument in the afternoon. It is unlikely that today we can expect serious changes in the balance of trading forces before the release of US nonfarm payrolls, but at the same time, buyers may try to gain a foothold above 1.0642. The bears’ task will be to protect this level. A false breakout at 1.0642 in the first half of the day will give a good signal to sell with a movement down to support at 1.0616, where the moving averages are passing, playing on the side of the buyers. After breaking through and consolidating below this range, as well as a reverse test from bottom to top, I expect to receive another sell signal with a downward target at 1.0593. The lowest target will be at least 1.0569, where I will take profits. If EUR/USD moves up during the European session and there are no bears at 1.0642, the buyers will certainly try to reach yesterday’s high. With this development of events, I will postpone short positions until resistance at 1.0667. You can sell there, but only on the condition of unsuccessful consolidation. I will open short positions immediately on a rebound from the high of 1.0693, reckoning an intraday downward correction of 30-35 pips.
The COT (Commitment of Traders) report for October 24 showed an increase in long positions and a decline in short ones. Considering that everyone expected the European Central Bank to stop the cycle of raising interest rates, its decision did not greatly affect the balance of trading forces in the market. As we can see, it even slightly helped the euro regain its position against the US dollar. The Federal Reserve has also held a policy meeting this week and made a similar decision to keep monetary policy unchanged. But given the US data, market participants wanted to find out clues from the FOMC members as to the possibility of the final rate hike in December this year. Such prospects could be bullish for the US dollar. The COT report indicated that long non-commercial positions increased by 1,256 to the level of 215,569, while short non-commercial positions fell by 1,587 to the level of 130,316. As a result, the spread between long and short positions narrowed by 1,350. EUR/USD closed last Friday higher at 1.0613 against 1.0596 a week ago, which confirms the upward correction of the euro.
Indicators’ signals
Moving averages
The instrument is trading above the 30 and 50-day moving averages. It indicates a further uptrend in EUR/USD.
Note: The period and prices of the moving averages are considered by the analyst on the 1-hour chart and differ from the general definition of classic daily moving averages on the daily chart.
Bollinger Bands
In case EUR/USD goes down, the indicator’s lower border at about 1.0605 will act as support.
Description of indicators
The material has been provided by InstaForex Company – www.instaforex.com
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