EUR/USD: trading plan for the US session on August 9 (analysis of morning deals). The euro shows no signs of life
August 9, 2023 1:24 pm
In my morning forecast, I highlighted the level of 1.0996 and recommended making market entry decisions based on it. Let’s look at the 5-minute chart and see what transpired there. There was an upward movement, but the low volatility expected due to the absence of statistical data didn’t reach 1.0996. The technical picture for the latter part of the day remained unchanged.
For opening long positions on EUR/USD:
The absence of statistical data is also anticipated during the American session. Moreover, there won’t be any comments from the Federal Reserve representatives, making the second half of the day rather uneventful. I prefer to act mainly based on the European forecast. A decline and the formation of a false breakout around the 1.0957 support, established based on yesterday’s results, will provide a buying signal to move up and update the resistance of 1.0996, which we haven’t reached yet. A breakout and an up-down test of this range without statistical data will strengthen the euro demand, giving a chance to continue the upward trend and update the high at 1.1037. The ultimate target remains the 1.1072 area, where I will book profits. If the EUR/USD declines and shows no activity at 1.0957 in the latter half of the day, where the moving averages lie, the bulls’ enthusiasm might quickly fade, posing problems for euro buyers. In such a scenario, only the formation of a false breakout around the next support at 1.0915 will give a buying signal for the euro. I will open long positions directly on a rebound from the 1.0871 low, aiming for an upward correction of 30-35 points within the day.
For opening short positions on EUR/USD:
Sellers have a chance today to maintain the bear market, but they need to defend 1.0996 and regain control over the 1.0957 level as quickly as possible, which they couldn’t achieve in the first half of the day. In case of a EUR/USD rise, I plan to open short positions only after forming a false breakout around 1.0996. This could lead to a drop towards 1.0957, just above which the moving averages are found, favoring the bulls. Only after breaking and settling below this range, followed by a bottom-up retest, can one get a sell signal, paving the way to the weekly low at 1.0915. The ultimate target will be the 1.0871 area, indicating a bearish trend formation. I will book profits there. Bulls will try to assert their presence if the EUR/USD moves up during the American session and bears are absent at 1.0996, which cannot be ruled out. In such a scenario, I’ll delay short positions until the next resistance at 1.1037. I might also sell there, but only after an unsuccessful consolidation. I will open short positions directly on a rebound from the 1.1072 high aiming for a downward correction of 30-35 points.
In the COT (Commitment of Traders) report for August 1st, a reduction in both long and short positions was observed. All of this occurred after meetings of the Federal Reserve System and the European Central Bank. Now traders are focusing on new data that will allow them to understand the regulators’ plans more accurately. In the near future, a U.S. inflation report will be released, which will clarify the situation. A further decrease in price pressure will likely allow the Fed to pause in September. Conversely, an increase will fuel even more discussions about the need for further tightening of policy, which will favor the dollar. However, even considering the downward correction, the optimal medium-term strategy under the current circumstances remains buying the euro on dips. The COT report shows that non-commercial long positions decreased by 10,573 to 240,074, while non-commercial short positions fell by 5,405 to 68,012. As a result, the spread between long and short positions narrowed by 4,894, favoring euro sellers. The closing price was 1.0999 compared to 1.1075 a week earlier.
Indicator Signals:
Moving Averages:
Trading is conducted above the 30 and 50-day moving averages, indicating a likelihood of the euro’s growth.
Note: The author considers the moving average period and prices on the H1 hourly chart and differ from the general definition of classic daily moving averages on the D1 daily chart.
Bollinger Bands:
In case of growth, the upper boundary of the indicator around 1.0975 will act as resistance.
Indicator Descriptions:
• 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 are speculators such as individual traders, hedge funds, and major institutions that use the futures market for speculative purposes and meet certain requirements.
• Non-commercial long positions represent the total long open position of non-commercial traders.
• Non-commercial short positions represent the total short open position of non-commercial traders.
• The total 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 highlighted the level of 1.0996 and recommended making market entry decisions based on it. Let’s look at the 5-minute chart and see what transpired there. There was an upward movement, but the low volatility expected due to the absence of statistical data didn’t reach 1.0996. The technical picture for the latter part of the day remained unchanged.
For opening long positions on EUR/USD:
The absence of statistical data is also anticipated during the American session. Moreover, there won’t be any comments from the Federal Reserve representatives, making the second half of the day rather uneventful. I prefer to act mainly based on the European forecast. A decline and the formation of a false breakout around the 1.0957 support, established based on yesterday’s results, will provide a buying signal to move up and update the resistance of 1.0996, which we haven’t reached yet. A breakout and an up-down test of this range without statistical data will strengthen the euro demand, giving a chance to continue the upward trend and update the high at 1.1037. The ultimate target remains the 1.1072 area, where I will book profits. If the EUR/USD declines and shows no activity at 1.0957 in the latter half of the day, where the moving averages lie, the bulls’ enthusiasm might quickly fade, posing problems for euro buyers. In such a scenario, only the formation of a false breakout around the next support at 1.0915 will give a buying signal for the euro. I will open long positions directly on a rebound from the 1.0871 low, aiming for an upward correction of 30-35 points within the day.
For opening short positions on EUR/USD:
Sellers have a chance today to maintain the bear market, but they need to defend 1.0996 and regain control over the 1.0957 level as quickly as possible, which they couldn’t achieve in the first half of the day. In case of a EUR/USD rise, I plan to open short positions only after forming a false breakout around 1.0996. This could lead to a drop towards 1.0957, just above which the moving averages are found, favoring the bulls. Only after breaking and settling below this range, followed by a bottom-up retest, can one get a sell signal, paving the way to the weekly low at 1.0915. The ultimate target will be the 1.0871 area, indicating a bearish trend formation. I will book profits there. Bulls will try to assert their presence if the EUR/USD moves up during the American session and bears are absent at 1.0996, which cannot be ruled out. In such a scenario, I’ll delay short positions until the next resistance at 1.1037. I might also sell there, but only after an unsuccessful consolidation. I will open short positions directly on a rebound from the 1.1072 high aiming for a downward correction of 30-35 points.
In the COT (Commitment of Traders) report for August 1st, a reduction in both long and short positions was observed. All of this occurred after meetings of the Federal Reserve System and the European Central Bank. Now traders are focusing on new data that will allow them to understand the regulators’ plans more accurately. In the near future, a U.S. inflation report will be released, which will clarify the situation. A further decrease in price pressure will likely allow the Fed to pause in September. Conversely, an increase will fuel even more discussions about the need for further tightening of policy, which will favor the dollar. However, even considering the downward correction, the optimal medium-term strategy under the current circumstances remains buying the euro on dips. The COT report shows that non-commercial long positions decreased by 10,573 to 240,074, while non-commercial short positions fell by 5,405 to 68,012. As a result, the spread between long and short positions narrowed by 4,894, favoring euro sellers. The closing price was 1.0999 compared to 1.1075 a week earlier.
Indicator Signals:
Moving Averages:
Trading is conducted above the 30 and 50-day moving averages, indicating a likelihood of the euro’s growth.
Note: The author considers the moving average period and prices on the H1 hourly chart and differ from the general definition of classic daily moving averages on the D1 daily chart.
Bollinger Bands:
In case of growth, the upper boundary of the indicator around 1.0975 will act as resistance.
Indicator Descriptions:
• 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 are speculators such as individual traders, hedge funds, and major institutions that use the futures market for speculative purposes and meet certain requirements.
• Non-commercial long positions represent the total long open position of non-commercial traders.
• Non-commercial short positions represent the total short open position of non-commercial traders.
• The total 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
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