EUR/USD: trading plan for the American session on April 26 (analysis of morning trades). The market continues to fluctuate
April 26, 2023 12:22 pm
In my morning forecast, I drew attention to the level of 1.1002 and recommended deciding to enter the market from there. Let’s look at the 5-minute chart and figure out what happened there. The breakthrough in this area occurred, but the reverse test did not happen. For this reason, getting a signal to buy euros was impossible. It was also impossible to sell in the area of 1.1029, as the test of this level did not occur either. The technical picture was completely revised for the second half of the day.
To open long positions for EURUSD, it is necessary:
In the second half of the day, euro buyers will continue to control the market, but I will not rush to open long positions at current highs. It is best to wait for data on the change in the volume of durable goods orders in the US and the report on the balance of foreign trade in goods, the reaction to which can be anything.
With a decrease in EUR/USD, I bet on the formation of a false breakout in the area of the nearest support of 1.1025, formed as a result of the first half of the day. By that time, the moving averages, which are on the side of the bulls, should also catch up. The signal to buy will lead to a new euro surge upward in the area of 1.1066. This range’s breakthrough and top-down test will strengthen the buyers’ confidence, which will return the upward trend and form an additional entry point for building up long positions with the update of the next resistance at 1.1096. The ultimate target remains the area of 1.1129, where I will fix the profit.
In the case of a decrease in EUR/USD and the absence of buyers at 1.1025 in the second half of the day, which is unlikely, the pressure on the euro will increase. Then only the formation of a false breakout in the area of the next support level of 1.0995 will give a signal to buy euros. I will open long positions immediately on the rebound from the minimum of 1.0966 with the aim of an upward correction of 30–35 points within the day.
To open short positions for EURUSD, it is necessary:
Sellers didn’t even try to defend the 1.1002 level, preferring to retreat to the area of weekly highs, where I expect the participation of major players. The important task for the second half of the day will be to protect this range, and good fundamental US statistics should help with that. A false breakout at 1.1066 forms a sell signal, possibly bringing the pair back to 1.1025, where the moving averages are located on the buyers’ side. Consolidation below this range and a reverse test from the bottom up are a direct path to 1.0995. The farthest target will be a new minimum of 1.0966, where profits will be fixed.
In the event of further upward movement of EUR/USD during the American session and the absence of bears at 1.1066 (which is also likely as more and more European politicians openly talk about the need to continue aggressively raising rates, clearly preparing markets for the continuation of the tightening cycle), I advise postponing short positions to the 1.1096 level. One can only sell after unsuccessful consolidation. I will open short positions immediately on the rebound from the maximum of 1.1129 with the goal of a downward correction of 30-35 points.
In the COT report (Commitment of Traders) for April 11, an increase in long positions and a decrease in short positions were recorded. Recent US statistics indicate a gradual overheating of the labor market and a reduction in retail sales volume, which will positively impact inflationary pressure in the US, allowing the Federal Reserve to halt the rate hike cycle. However, according to the minutes of the last meeting, the managers intend to wait to do this, and most likely, in May this year, we will see another rate hike of 0.25%. This will allow the US dollar to maintain its leading position against the euro, trading below 1.1000. Nothing is interesting this week, so euro buyers will have all the chances to continue the upward trend. The COT report shows that non-commercial long positions increased by 18,764 to 244,180, while non-commercial short positions decreased by 1,181 to 80,842. As a result of the week, the total non-commercial net position decreased to 162,496 versus 143,393. The weekly closing price decreased and amounted to 1.0950 versus 1.1.
Indicator signals:
Moving averages
Trading is conducted above the 30- and 50-day moving averages, indicating an attempt by bulls to seize the initiative.
Note: The author considers the period and prices of the moving averages on the hourly chart H1 and differ from the general definition of classical daily moving averages on the daily chart D1.
Bollinger Bands
In case of a decline, the lower border of the indicator at 1.0940 will act as support.
Description of indicators
• Moving average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
• Moving average (determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence – convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period 26. SMA period 9
• 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 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 total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
In my morning forecast, I drew attention to the level of 1.1002 and recommended deciding to enter the market from there. Let’s look at the 5-minute chart and figure out what happened there. The breakthrough in this area occurred, but the reverse test did not happen. For this reason, getting a signal to buy euros was impossible. It was also impossible to sell in the area of 1.1029, as the test of this level did not occur either. The technical picture was completely revised for the second half of the day.
To open long positions for EURUSD, it is necessary:
In the second half of the day, euro buyers will continue to control the market, but I will not rush to open long positions at current highs. It is best to wait for data on the change in the volume of durable goods orders in the US and the report on the balance of foreign trade in goods, the reaction to which can be anything.
With a decrease in EUR/USD, I bet on the formation of a false breakout in the area of the nearest support of 1.1025, formed as a result of the first half of the day. By that time, the moving averages, which are on the side of the bulls, should also catch up. The signal to buy will lead to a new euro surge upward in the area of 1.1066. This range’s breakthrough and top-down test will strengthen the buyers’ confidence, which will return the upward trend and form an additional entry point for building up long positions with the update of the next resistance at 1.1096. The ultimate target remains the area of 1.1129, where I will fix the profit.
In the case of a decrease in EUR/USD and the absence of buyers at 1.1025 in the second half of the day, which is unlikely, the pressure on the euro will increase. Then only the formation of a false breakout in the area of the next support level of 1.0995 will give a signal to buy euros. I will open long positions immediately on the rebound from the minimum of 1.0966 with the aim of an upward correction of 30–35 points within the day.
To open short positions for EURUSD, it is necessary:
Sellers didn’t even try to defend the 1.1002 level, preferring to retreat to the area of weekly highs, where I expect the participation of major players. The important task for the second half of the day will be to protect this range, and good fundamental US statistics should help with that. A false breakout at 1.1066 forms a sell signal, possibly bringing the pair back to 1.1025, where the moving averages are located on the buyers’ side. Consolidation below this range and a reverse test from the bottom up are a direct path to 1.0995. The farthest target will be a new minimum of 1.0966, where profits will be fixed.
In the event of further upward movement of EUR/USD during the American session and the absence of bears at 1.1066 (which is also likely as more and more European politicians openly talk about the need to continue aggressively raising rates, clearly preparing markets for the continuation of the tightening cycle), I advise postponing short positions to the 1.1096 level. One can only sell after unsuccessful consolidation. I will open short positions immediately on the rebound from the maximum of 1.1129 with the goal of a downward correction of 30-35 points.
In the COT report (Commitment of Traders) for April 11, an increase in long positions and a decrease in short positions were recorded. Recent US statistics indicate a gradual overheating of the labor market and a reduction in retail sales volume, which will positively impact inflationary pressure in the US, allowing the Federal Reserve to halt the rate hike cycle. However, according to the minutes of the last meeting, the managers intend to wait to do this, and most likely, in May this year, we will see another rate hike of 0.25%. This will allow the US dollar to maintain its leading position against the euro, trading below 1.1000. Nothing is interesting this week, so euro buyers will have all the chances to continue the upward trend. The COT report shows that non-commercial long positions increased by 18,764 to 244,180, while non-commercial short positions decreased by 1,181 to 80,842. As a result of the week, the total non-commercial net position decreased to 162,496 versus 143,393. The weekly closing price decreased and amounted to 1.0950 versus 1.1.
Indicator signals:
Moving averages
Trading is conducted above the 30- and 50-day moving averages, indicating an attempt by bulls to seize the initiative.
Note: The author considers the period and prices of the moving averages on the hourly chart H1 and differ from the general definition of classical daily moving averages on the daily chart D1.
Bollinger Bands
In case of a decline, the lower border of the indicator at 1.0940 will act as support.
Description of indicators
• Moving average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
• Moving average (determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence – convergence/divergence of moving averages) Fast EMA period 12. Slow EMA period 26. SMA period 9
• 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 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 total non-commercial net position is the difference between the short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
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