EUR/USD: trading plan for North American session on October 30. EUR remains in sideways channel
October 30, 2023 1:24 pm
In my morning forecast, I paid attention to the level of 1.0554 and recommended making decisions on entering the market from there. Let’s look at the 5-minute chart and try to grasp the point what happened there. EUR/USD declined in the first half of the day. A false breakout at 1.0554 generated a buy signal, which produced an upward movement of more than 30 pips. The technical picture has not been revised for the second half of the day.
What is needed to open long positions on EUR/USD
Germany’s consumer price index may have a negative impact on further growth of the euro, as well as the speeches of ECB Vice-Chair of the Supervisory Board Andrea Enria. The main task of buyers remains to protect the nearest support of 1.0554, where the moving averages are located, playing on their side. A false breakout there will provide a good entry point into long positions in anticipation of testing the resistance at 1.0586. A breakout and update from top to bottom of this range will give a chance for a breakthrough to 1.0616. The highest target will be around 1.0641, where I will take profits. If EUR/USD declines and there is no activity at 1.0554, pressure on the euro will return in the afternoon, leading to a larger move down to last week’s low. In this case, only a false breakout in the area of 1.0525 will form a signal to enter the market. I will open long positions immediately on a dip from 1.0497, betting on an upward correction of 30-35 pips within the day.
What is needed to open short positions on EUR/USD
The sellers did everything in their power and protected 1.0586 at mid-day. However, the economic calendar reminds us of important statistics ahead that can change everything. For this reason, only one more false breakout at 1.0586 will provide a sell signal with a move down to support 1.0554. After breaking through and consolidating below this range, as well as a reverse test from bottom to top in light of the data about a slowdown in consumer inflation in Germany, I expect to receive another sell signal with a fall to 1.0525. The lowest target will be at least 1.0497, where I will take profits. If EUR/USD moves up during the American session and there are no bears at 1.0586, buyers will certainly try to return to the market. With this development of events, I will postpone short positions until resistance 1.0616. You can sell there, but only after unsuccessful consolidation. I will open short positions immediately on a rebound from the high of 1.0641, betting on a downward correction of 30-35 pips.
The COT (Commitment of Traders) report for October 17 showed an increase in long positions and a minor decrease in short positions. Quite strong economic data was released in the United States, including retail sales and the labor market, indicating the need for further rate hikes. However, before the silence that Fed policymakers usually take before the next policy meeting, some of them dropped a hint that no one would vote for another rate increase at the meeting in November. Such prospects weakened demand for the US dollar and restored the confidence of the euro bulls. Apparently, this sentiment will persist in the near future. The COT report revealed that long non-commercial positions immediately increased by 6,791 to 214,313 whereas short non-commercial positions decreased by only 87 to 131,903. As a result, the spread between long and short positions fell by 2,445. EUR/USD closed last trading week lower at 1.0596 against 1.0630 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 further growth 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 1.0554 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.
The material has been provided by InstaForex Company – www.instaforex.com
In my morning forecast, I paid attention to the level of 1.0554 and recommended making decisions on entering the market from there. Let’s look at the 5-minute chart and try to grasp the point what happened there. EUR/USD declined in the first half of the day. A false breakout at 1.0554 generated a buy signal, which produced an upward movement of more than 30 pips. The technical picture has not been revised for the second half of the day.
What is needed to open long positions on EUR/USD
Germany’s consumer price index may have a negative impact on further growth of the euro, as well as the speeches of ECB Vice-Chair of the Supervisory Board Andrea Enria. The main task of buyers remains to protect the nearest support of 1.0554, where the moving averages are located, playing on their side. A false breakout there will provide a good entry point into long positions in anticipation of testing the resistance at 1.0586. A breakout and update from top to bottom of this range will give a chance for a breakthrough to 1.0616. The highest target will be around 1.0641, where I will take profits. If EUR/USD declines and there is no activity at 1.0554, pressure on the euro will return in the afternoon, leading to a larger move down to last week’s low. In this case, only a false breakout in the area of 1.0525 will form a signal to enter the market. I will open long positions immediately on a dip from 1.0497, betting on an upward correction of 30-35 pips within the day.
What is needed to open short positions on EUR/USD
The sellers did everything in their power and protected 1.0586 at mid-day. However, the economic calendar reminds us of important statistics ahead that can change everything. For this reason, only one more false breakout at 1.0586 will provide a sell signal with a move down to support 1.0554. After breaking through and consolidating below this range, as well as a reverse test from bottom to top in light of the data about a slowdown in consumer inflation in Germany, I expect to receive another sell signal with a fall to 1.0525. The lowest target will be at least 1.0497, where I will take profits. If EUR/USD moves up during the American session and there are no bears at 1.0586, buyers will certainly try to return to the market. With this development of events, I will postpone short positions until resistance 1.0616. You can sell there, but only after unsuccessful consolidation. I will open short positions immediately on a rebound from the high of 1.0641, betting on a downward correction of 30-35 pips.
The COT (Commitment of Traders) report for October 17 showed an increase in long positions and a minor decrease in short positions. Quite strong economic data was released in the United States, including retail sales and the labor market, indicating the need for further rate hikes. However, before the silence that Fed policymakers usually take before the next policy meeting, some of them dropped a hint that no one would vote for another rate increase at the meeting in November. Such prospects weakened demand for the US dollar and restored the confidence of the euro bulls. Apparently, this sentiment will persist in the near future. The COT report revealed that long non-commercial positions immediately increased by 6,791 to 214,313 whereas short non-commercial positions decreased by only 87 to 131,903. As a result, the spread between long and short positions fell by 2,445. EUR/USD closed last trading week lower at 1.0596 against 1.0630 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 further growth 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 1.0554 will act as support.
Description of indicators
The material has been provided by InstaForex Company – www.instaforex.com
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