EUR/USD: trading plan for the American session on June 9 (analysis of morning deals). The euro is gradually declining
June 9, 2023 11:23 am
In my morning forecast, I drew attention to the level of 1.0768 and recommended making trading decisions based on it. Let’s look at the 5-minute chart and analyze what happened there. The euro experienced a decline but didn’t quite reach the formation of a false breakout at this level. I warned that swift growth of the pair around 1.0768 is necessary; otherwise, yesterday’s upward movement may be negated. So far, this scenario is unfolding. The technical picture remains unchanged for the second half of the day.
To open long positions on EUR/USD, the following conditions are required:
Considering that there is no statistical data or planned speeches by Federal Reserve representatives during the US session, buyers have even more chances of losing their advantage. Therefore, there is no rush to increase long positions. After another decline in EUR/USD and the formation of a false breakout around 1.0736, I will consider buying, which would provide an opportunity to enter long positions with a target of reaching the support level at 1.0768, which acted as a support earlier in the morning. A breakthrough and a test from above to below this range are essential for buyers, as it would strengthen the demand for the euro, creating an additional entry point for increasing long positions with a new high target of around 1.0800. The ultimate target remains in the area of 1.0830, where I will take profits.
In the case of further decline in EUR/USD and the absence of buyers at 1.0736, where the moving averages support the bulls, the pressure on the euro will only increase. Therefore, only the formation of a false breakout around the next support level at 1.0705, formed based on yesterday’s data, will signal to buy the euro. I will consider opening long positions on a bounce from 1.0669, targeting an upward correction of 30-35 points within the day.
To open short positions on EUR/USD, the following conditions are required:
Bears managed to break below 1.0768, and as long as trading remains below this range, pressure on the pair can be expected. As mentioned above, no fundamental data works in favor of sellers. However, it is best to take your time selling in the second half of the day. I will act only after a failed consolidation above the resistance level of 1.0768. A false breakout at this level will signal to sell and push the pair back toward 1.0736, where the moving averages support the bulls. A consolidation below this range and a reverse test from below to above will lead directly to 1.0705. The ultimate target will be around 1.0669, where I will take profits.
In the event of an upward movement of EUR/USD during the US session and the absence of bears at 1.0768, the demand for the euro will return, potentially leading to a more significant surge in the pair. In that case, I will postpone short positions until a new resistance level at 1.0800 is reached. Selling can be considered only after a failed consolidation. I will open short positions on a bounce from the maximum of 1.0830, targeting a downward correction of 30-35 points.
The COT (Commitment of Traders) report for May 30 showed a reduction in both long and short positions. Long positions decreased significantly, confirming a decrease in demand for risky assets. Concerns about the slowdown in the European economy and the onset of a recession, along with the continuation of an aggressive policy by the European Central Bank, despite the initial signs of a slowdown in underlying inflationary pressure, discourage investors from buying the euro, forcing them to adopt a wait-and-see position. Meanwhile, the US labor market continues to show strength, so after the pause in June, the Fed will likely continue to raise interest rates, thereby maintaining demand for the dollar. According to the COT report, non-commercial long positions decreased by 8,253 to 241,817, while non-commercial short positions decreased by 242 to 76,092. As a result, the overall non-commercial net position decreased to 163,054 from 185,045. The weekly closing price decreased to 1.0732 from 1.0793.
Indicator signals:
Moving Averages
Trading is conducted above the 30 and 50-day moving averages, indicating a probability of the euro’s growth.
Note: The period and prices of the moving averages considered by the author are based on the H1 hourly chart and differ from the general definition of classical daily moving averages on the D1 daily chart.
Bollinger Bands
In case of an upward movement, the upper boundary of the indicator around 1.0790 will act as resistance.
Description of Indicators:
Moving average (determines the current trend by smoothing out volatility and noise). Period 50. Marked in yellow on the chart.
Moving average (determines the current trend by smoothing out volatility and noise). Period 30. Marked in green on the chart.
MACD indicator (Moving Average Convergence/Divergence) – 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, use the futures market for speculative purposes and meet specific 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 overall non-commercial net position is the difference between non-commercial traders’ short and long positions.
The material has been provided by InstaForex Company – www.instaforex.com
In my morning forecast, I drew attention to the level of 1.0768 and recommended making trading decisions based on it. Let’s look at the 5-minute chart and analyze what happened there. The euro experienced a decline but didn’t quite reach the formation of a false breakout at this level. I warned that swift growth of the pair around 1.0768 is necessary; otherwise, yesterday’s upward movement may be negated. So far, this scenario is unfolding. The technical picture remains unchanged for the second half of the day.
To open long positions on EUR/USD, the following conditions are required:
Considering that there is no statistical data or planned speeches by Federal Reserve representatives during the US session, buyers have even more chances of losing their advantage. Therefore, there is no rush to increase long positions. After another decline in EUR/USD and the formation of a false breakout around 1.0736, I will consider buying, which would provide an opportunity to enter long positions with a target of reaching the support level at 1.0768, which acted as a support earlier in the morning. A breakthrough and a test from above to below this range are essential for buyers, as it would strengthen the demand for the euro, creating an additional entry point for increasing long positions with a new high target of around 1.0800. The ultimate target remains in the area of 1.0830, where I will take profits.
In the case of further decline in EUR/USD and the absence of buyers at 1.0736, where the moving averages support the bulls, the pressure on the euro will only increase. Therefore, only the formation of a false breakout around the next support level at 1.0705, formed based on yesterday’s data, will signal to buy the euro. I will consider opening long positions on a bounce from 1.0669, targeting an upward correction of 30-35 points within the day.
To open short positions on EUR/USD, the following conditions are required:
Bears managed to break below 1.0768, and as long as trading remains below this range, pressure on the pair can be expected. As mentioned above, no fundamental data works in favor of sellers. However, it is best to take your time selling in the second half of the day. I will act only after a failed consolidation above the resistance level of 1.0768. A false breakout at this level will signal to sell and push the pair back toward 1.0736, where the moving averages support the bulls. A consolidation below this range and a reverse test from below to above will lead directly to 1.0705. The ultimate target will be around 1.0669, where I will take profits.
In the event of an upward movement of EUR/USD during the US session and the absence of bears at 1.0768, the demand for the euro will return, potentially leading to a more significant surge in the pair. In that case, I will postpone short positions until a new resistance level at 1.0800 is reached. Selling can be considered only after a failed consolidation. I will open short positions on a bounce from the maximum of 1.0830, targeting a downward correction of 30-35 points.
The COT (Commitment of Traders) report for May 30 showed a reduction in both long and short positions. Long positions decreased significantly, confirming a decrease in demand for risky assets. Concerns about the slowdown in the European economy and the onset of a recession, along with the continuation of an aggressive policy by the European Central Bank, despite the initial signs of a slowdown in underlying inflationary pressure, discourage investors from buying the euro, forcing them to adopt a wait-and-see position. Meanwhile, the US labor market continues to show strength, so after the pause in June, the Fed will likely continue to raise interest rates, thereby maintaining demand for the dollar. According to the COT report, non-commercial long positions decreased by 8,253 to 241,817, while non-commercial short positions decreased by 242 to 76,092. As a result, the overall non-commercial net position decreased to 163,054 from 185,045. The weekly closing price decreased to 1.0732 from 1.0793.
Indicator signals:
Moving Averages
Trading is conducted above the 30 and 50-day moving averages, indicating a probability of the euro’s growth.
Note: The period and prices of the moving averages considered by the author are based on the H1 hourly chart and differ from the general definition of classical daily moving averages on the D1 daily chart.
Bollinger Bands
In case of an upward movement, the upper boundary of the indicator around 1.0790 will act as resistance.
Description of Indicators:
The material has been provided by InstaForex Company – www.instaforex.com
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