EUR/USD: trading plan for the US session on April 15th (analysis of morning deals). Euro is at an impasse
April 15, 2024 2:23 pm
In my morning forecast, I paid attention to the level of 1.0642 and planned to make decisions based on it for entering the market. Let’s look at the 5-minute chart and figure out what happened there. There was a decline, but I never saw a retest of 1.0642. The very low market volatility, around 15 points, prevented finding suitable entry points. The technical picture remained unchanged for the second half of the day.
For opening long positions on EUR/USD, the following is required:
Considering the absence of important statistics and the bearish market, it was unlikely to expect a strong euro recovery, although there were prerequisites for it. Now, the focus will shift to the American session and the retail sales data, which could set the market direction for the dollar early in the week. News of a sharp increase in sales will further encourage traders to sell the euro and buy the US dollar, leading to another sell-off of EUR/USD along the trend, which I intend to take advantage of. I will rely on previous levels since the technical picture did not change after the European session. I prefer to act only on declines and after forming a false breakout around 1.0642, where the pair is currently heading. This would be a suitable scenario for buying with expectations of a small correction early in the week around 1.0673, which we did not reach, where the moving averages are located, favoring sellers. Breaking and updating above this range will strengthen the pair with a chance of a surge to 1.0701. The ultimate target will be a maximum of 1.0728, where I will take profit. In the scenario of further decline of EUR/USD and lack of activity around 1.0642 in the second half of the day, which seems likely, pressure on the euro will only increase. In such a case, I will enter the market only after forming a false breakout around the next support at 1.0616. I plan to open long positions immediately on the rebound from 1.0593 with a target of an upward correction of 30-35 points within the day.
For opening short positions on EUR/USD, the following is required:
Euro sellers have all the chances for further decline. Strong US data and the formation of a false breakout around the morning resistance at 1.0673 will be an ideal scenario for entering short positions with the prospect of updating support at 1.0642. Breaking and holding below this range and a reverse test from below will provide another selling point, with the pair moving towards 1.0616, reinforcing the bearish trend. There, I expect more active involvement of large buyers. The ultimate target will be the minimum of 1.0593, where I will take profit. In case of an upward movement of EUR/USD in the second half of the day and the absence of bears at 1.0673, bulls will try to play back some of the declines that occurred last week after releasing strong statistics related to US inflation. In this case, I will postpone sales until testing the next resistance at 1.0701. There, I will also sell, but only after an unsuccessful breakout. I plan to open short positions immediately on the rebound from 1.0728 with a target of a downward correction of 30-35 points.
In the COT report (Commitment of Traders) for April 2nd, there was an increase in both long and short positions. However, there were significantly more euro sellers – especially considering the US labor market data, indicating the economy’s strength. Although these indicators still need to be reflected in the report, euro buyers will not be able to live comfortably in the near future. Given the active policy and statements of the European Central Bank representatives, increasingly hinting at inflation reduction in the eurozone and a possible swift abandonment of high-interest rates, the chances of euro growth in the near future are extremely low. For this reason, I am betting on further development of the bullish trend for the US dollar and a decline in the euro. The COT report indicates that non-commercial long positions increased by 8,065 to 188,258, while non-commercial short positions jumped by 22,465 to 171,464. As a result, the spread between long and short positions narrowed by 2,866.
Indicator signals:
Moving Averages
Trading is below the 30 and 50-day moving averages, indicating further pair decline.
Note: The author considers the period and prices of moving averages on the hourly H1 chart, which differs from the general definition of classic daily moving averages on the daily D1 chart.
Bollinger Bands
In case of decline, the lower boundary of the indicator, around 1.0635, 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 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 attention to the level of 1.0642 and planned to make decisions based on it for entering the market. Let’s look at the 5-minute chart and figure out what happened there. There was a decline, but I never saw a retest of 1.0642. The very low market volatility, around 15 points, prevented finding suitable entry points. The technical picture remained unchanged for the second half of the day.
For opening long positions on EUR/USD, the following is required:
Considering the absence of important statistics and the bearish market, it was unlikely to expect a strong euro recovery, although there were prerequisites for it. Now, the focus will shift to the American session and the retail sales data, which could set the market direction for the dollar early in the week. News of a sharp increase in sales will further encourage traders to sell the euro and buy the US dollar, leading to another sell-off of EUR/USD along the trend, which I intend to take advantage of. I will rely on previous levels since the technical picture did not change after the European session. I prefer to act only on declines and after forming a false breakout around 1.0642, where the pair is currently heading. This would be a suitable scenario for buying with expectations of a small correction early in the week around 1.0673, which we did not reach, where the moving averages are located, favoring sellers. Breaking and updating above this range will strengthen the pair with a chance of a surge to 1.0701. The ultimate target will be a maximum of 1.0728, where I will take profit. In the scenario of further decline of EUR/USD and lack of activity around 1.0642 in the second half of the day, which seems likely, pressure on the euro will only increase. In such a case, I will enter the market only after forming a false breakout around the next support at 1.0616. I plan to open long positions immediately on the rebound from 1.0593 with a target of an upward correction of 30-35 points within the day.
For opening short positions on EUR/USD, the following is required:
Euro sellers have all the chances for further decline. Strong US data and the formation of a false breakout around the morning resistance at 1.0673 will be an ideal scenario for entering short positions with the prospect of updating support at 1.0642. Breaking and holding below this range and a reverse test from below will provide another selling point, with the pair moving towards 1.0616, reinforcing the bearish trend. There, I expect more active involvement of large buyers. The ultimate target will be the minimum of 1.0593, where I will take profit. In case of an upward movement of EUR/USD in the second half of the day and the absence of bears at 1.0673, bulls will try to play back some of the declines that occurred last week after releasing strong statistics related to US inflation. In this case, I will postpone sales until testing the next resistance at 1.0701. There, I will also sell, but only after an unsuccessful breakout. I plan to open short positions immediately on the rebound from 1.0728 with a target of a downward correction of 30-35 points.
In the COT report (Commitment of Traders) for April 2nd, there was an increase in both long and short positions. However, there were significantly more euro sellers – especially considering the US labor market data, indicating the economy’s strength. Although these indicators still need to be reflected in the report, euro buyers will not be able to live comfortably in the near future. Given the active policy and statements of the European Central Bank representatives, increasingly hinting at inflation reduction in the eurozone and a possible swift abandonment of high-interest rates, the chances of euro growth in the near future are extremely low. For this reason, I am betting on further development of the bullish trend for the US dollar and a decline in the euro. The COT report indicates that non-commercial long positions increased by 8,065 to 188,258, while non-commercial short positions jumped by 22,465 to 171,464. As a result, the spread between long and short positions narrowed by 2,866.
Indicator signals:
Moving Averages
Trading is below the 30 and 50-day moving averages, indicating further pair decline.
Note: The author considers the period and prices of moving averages on the hourly H1 chart, which differs from the general definition of classic daily moving averages on the daily D1 chart.
Bollinger Bands
In case of decline, the lower boundary of the indicator, around 1.0635, 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 short and long positions of non-commercial traders.
The material has been provided by InstaForex Company – www.instaforex.com
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