EUR/USD: trading plan for the American session on April 5 (analysis of morning deals). Market volatility has dropped sharply
April 5, 2023 2:24 pm
In my morning forecast, I paid close attention to level 1.0927 and recommended making entry selections there. Let’s analyze the 5-minute chart to see what happened. Due to a significant drop in market volatility, the probability of a false breakout at this level never decreased. Buyers have realized that being aggressive isn’t worth it, or the market is slowly preparing for Friday’s important U.S. labor market data. Still, one thing is certain: the closer we approach 1.1000, the fewer individuals are willing to take a risk on a break above this level.
To initiate long positions on the EUR/USD, you must:
Given that nothing noteworthy occurred in the first half of the day, the focus will likely shift to statistics on the U.S. labor market, and there is certainly something to consider. The drop in the number of ADP employees may negatively influence the U.S. dollar, allowing euro purchasers to defend 1.0927. ISM’s measure of business activity in the services sector will be more important than the foreign trade balance numbers. In contrast, a rise in the indicator will restore demand for the dollar and increase the pressure on the pair. So, only the formation of a false breakout around 1.0927 will signal buying EUR/USD to return and update this month’s maximum to around 1.0975. A breakout and a top-down test of this range provide an extra entry point for long positions, with a rise to 1.1002 upon a breakout and a top-down test. The area around 1.1031 remains the farthest target, where I will fix the profit. With the possibility of a loss in EUR/USD and the absence of buyers above 1.0927 in the afternoon, which cannot be ruled out because only excellent data on the U.S. labor market would be sufficient for the market to fail again, pressure will resume on the euro, and we will see a decline to 1.0881. Only the formation of a false collapse will serve as an indication to purchase the euro. I will begin long positions immediately, anticipating a rebound from the day’s low of 1.0833, targeting a 30-point-plus daily corrective.
To establish short positions on the EUR/USD, you must:
Almost nothing has changed for sellers: an essential thing is not to miss the nearest resistance of 1.0975, which was challenged during yesterday’s American session. I anticipate that new major players will respond favorably to positive statistics about the United States. Consequently, the optimum scenario for starting new short positions continues to be the formation of a false breakout at 1.0975, which would lead to a decline in the pair to the area of 1.0927 support. A breakout and retest of this range will strengthen the pressure on the euro, pushing the pair to 1.0881. A consolidation below this level will also allow entry to 1.0833, restoring sellers’ control over the market. I will fix the profit there. In the event of a rise in EUR/USD during the American session and the lack of bears around 1.0975, a plausible scenario, I recommend delaying short positions until the level of 1.1002. Selling is permitted only after a failed consolidation. I will begin short positions immediately in anticipation of a rebound from the maximum of 1.1031 with the target of a 30-35 point decline.
The Commitment of Traders (COT) report for March 28 revealed a rise in both long and short positions. Since nothing important happened last week and the U.S. price index of personal consumption expenditures wasn’t as good as experts thought it would be, the Federal Reserve is likely to raise interest rates at its next meeting. Still, the aggressive European Central Bank will keep raising interest rates aggressively, making it possible for European currency buyers to act more aggressively each time the euro loses a lot of value against the dollar. Aside from the U.S. unemployment data, there is nothing noteworthy this week. Therefore, the euro has a good chance of surpassing the highs of March. According to the COT data, long non-profit positions increased by 7,093 to 222,918, while short non-profit positions increased by 6,910 to 77,893. The total non-commercial net position increased from 144,848 to 145,025 toward the week’s conclusion. The weekly ending price increased from 1.0821 to 1.0896.
Signals from indicators
Moving Averages
The fact that trading occurs just above the 30-day and 50-day moving averages demonstrates the lateral nature of the market.
The author considers the period and prices of moving averages on the hourly chart H1, which differ from the standard definition of daily moving averages on the daily chart D1.
Bollinger Bands
The indicator’s upper limit, near 1.0970, will act as resistance in an upward trend.
Description of indicators
Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
MACD indicator (Moving Average Convergence / Divergence – moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
Bollinger Bands (Bollinger Bands). Period 20
Non-profit speculative traders, such as individual traders, hedge funds, and large institutions, use the futures market for speculative purposes and to 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 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 paid close attention to level 1.0927 and recommended making entry selections there. Let’s analyze the 5-minute chart to see what happened. Due to a significant drop in market volatility, the probability of a false breakout at this level never decreased. Buyers have realized that being aggressive isn’t worth it, or the market is slowly preparing for Friday’s important U.S. labor market data. Still, one thing is certain: the closer we approach 1.1000, the fewer individuals are willing to take a risk on a break above this level.
To initiate long positions on the EUR/USD, you must:
Given that nothing noteworthy occurred in the first half of the day, the focus will likely shift to statistics on the U.S. labor market, and there is certainly something to consider. The drop in the number of ADP employees may negatively influence the U.S. dollar, allowing euro purchasers to defend 1.0927. ISM’s measure of business activity in the services sector will be more important than the foreign trade balance numbers. In contrast, a rise in the indicator will restore demand for the dollar and increase the pressure on the pair. So, only the formation of a false breakout around 1.0927 will signal buying EUR/USD to return and update this month’s maximum to around 1.0975. A breakout and a top-down test of this range provide an extra entry point for long positions, with a rise to 1.1002 upon a breakout and a top-down test. The area around 1.1031 remains the farthest target, where I will fix the profit. With the possibility of a loss in EUR/USD and the absence of buyers above 1.0927 in the afternoon, which cannot be ruled out because only excellent data on the U.S. labor market would be sufficient for the market to fail again, pressure will resume on the euro, and we will see a decline to 1.0881. Only the formation of a false collapse will serve as an indication to purchase the euro. I will begin long positions immediately, anticipating a rebound from the day’s low of 1.0833, targeting a 30-point-plus daily corrective.
To establish short positions on the EUR/USD, you must:
Almost nothing has changed for sellers: an essential thing is not to miss the nearest resistance of 1.0975, which was challenged during yesterday’s American session. I anticipate that new major players will respond favorably to positive statistics about the United States. Consequently, the optimum scenario for starting new short positions continues to be the formation of a false breakout at 1.0975, which would lead to a decline in the pair to the area of 1.0927 support. A breakout and retest of this range will strengthen the pressure on the euro, pushing the pair to 1.0881. A consolidation below this level will also allow entry to 1.0833, restoring sellers’ control over the market. I will fix the profit there. In the event of a rise in EUR/USD during the American session and the lack of bears around 1.0975, a plausible scenario, I recommend delaying short positions until the level of 1.1002. Selling is permitted only after a failed consolidation. I will begin short positions immediately in anticipation of a rebound from the maximum of 1.1031 with the target of a 30-35 point decline.
The Commitment of Traders (COT) report for March 28 revealed a rise in both long and short positions. Since nothing important happened last week and the U.S. price index of personal consumption expenditures wasn’t as good as experts thought it would be, the Federal Reserve is likely to raise interest rates at its next meeting. Still, the aggressive European Central Bank will keep raising interest rates aggressively, making it possible for European currency buyers to act more aggressively each time the euro loses a lot of value against the dollar. Aside from the U.S. unemployment data, there is nothing noteworthy this week. Therefore, the euro has a good chance of surpassing the highs of March. According to the COT data, long non-profit positions increased by 7,093 to 222,918, while short non-profit positions increased by 6,910 to 77,893. The total non-commercial net position increased from 144,848 to 145,025 toward the week’s conclusion. The weekly ending price increased from 1.0821 to 1.0896.
Signals from indicators
Moving Averages
The fact that trading occurs just above the 30-day and 50-day moving averages demonstrates the lateral nature of the market.
The author considers the period and prices of moving averages on the hourly chart H1, which differ from the standard definition of daily moving averages on the daily chart D1.
Bollinger Bands
The indicator’s upper limit, near 1.0970, will act as resistance in an upward trend.
Description of indicators
The material has been provided by InstaForex Company – www.instaforex.com
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