EUR/USD: trading plan for the US session on July 4 (analysis of morning deals). Low volatility and lack of interest
July 4, 2023 11:22 am
In my morning forecast, I drew attention to the level of 1.0884 and recommended making market entry decisions based on it. Let’s look at the 5-minute chart and understand what happened there. The euro did fall in the first half of the day, but due to low volatility and a lack of news, the pair could not reach 1.0884. For this reason, no entry signals were formed. The technical picture should have been reviewed for the second half of the day.
Requirements for opening long positions in EUR/USD:
Considering that the second half of the day promises to be even less volatile and trading volume will be even lower, it is unlikely that we will see good entry points into the market. Independence Day in the US is a public holiday for several markets, so it’s best to be patient until tomorrow and make considered decisions with major players rather than getting caught up in speculative manipulation.
In case of the pair’s decline, I will only act in the area of support at 1.0884, formed due to yesterday’s unsuccessful attempt by bears to crash the market. The formation of a false breakout there will give a buy signal, allowing a return to the quite significant resistance of 1.0933. A breakout and a top-down test of this range will strengthen demand for the euro, giving it a chance to break out to 1.0975, but this is unlikely. The farthest target remains the area of 1.1010, where I will fix the profit. Bears may continue to act more actively in anticipation of a downward correction in the scenario of the EUR/USD falling and the lack of buyers at 1.0884 due to the lack of important statistics in the second half of the day. Therefore, only the formation of a false breakout in the area of the next support at 1.0838 will give a signal to buy the euro. I will open long positions immediately on a rebound from the minimum of 1.0807 with the aim of an upward correction of 30-35 points within the day.
Requirements for opening short positions in EUR/USD:
Considering that the market volatility for euro sellers also does not have many scenarios: bears need to keep trading below 1.0933, and protecting this level will be a priority task for the second half of the day. An unsuccessful consolidation there will give a sell signal, capable of pushing EUR/USD to 1.0884. Consolidation below this range and a reverse test from bottom to top is a direct road to 1.0838. The farthest target will be the minimum of 1.0807, where I will fix the profit. In case of an upward movement of EUR/USD during the American session and the absence of bears at 1.0933, the situation will return under the control of buyers, and the pair will break out of the sideways channel. In this case, I will postpone short positions until the next resistance of 1.0975. It is also possible to sell there, but only after an unsuccessful consolidation. I will open short positions immediately on a rebound from the maximum of 1.1010 with the aim of a downward correction of 30-35 points.
In the COT (Commitment of Traders) report for June 27, there was a reduction in long and short positions, leaving the balance of power in the market virtually unchanged. Last week’s US GDP data once again confirmed the resilience of the American economy, even in the face of high-interest rates, allowing the Federal Reserve to continue to actively combat high inflation, which is gradually returning to normal. The minutes of the Fed meeting will be released soon, as well as the US labor market condition report, which could strengthen the American dollar against the euro. The optimal medium-term strategy in the current conditions remains purchases on the decline. The COT report indicated that non-commercial long positions decreased by 5,422 to 223,977, while non-commercial short positions dropped by 5,801 to 78,949. As a result of the week, the overall non-commercial net position slightly increased and was 145,028 compared to 144,025. The weekly closing price rose to 11006 compared to 1.0968.
Indicator signals:
Moving averages
Trading is conducted around the 30 and 50-day moving averages, indicating a market equilibrium.
Note: The author on the H1 chart considers the period and prices of moving averages and differ from the general definition of classical daily moving averages on the D1 chart.
Bollinger Bands
In case of growth, the upper border of the indicator will act as resistance at around 1.0920.
Indicator descriptions
• Moving average (smooths volatility and noise to determine the current trend). Period 50. It is marked in yellow on the chart.
• Moving average (smooths volatility and noise to determine the current trend). Period 30. It is 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 that use the futures market for speculative purposes and meet certain requirements.
• Non-commercial long positions represent the total open long position of non-commercial traders.
• Non-commercial short positions represent the total open short 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 drew attention to the level of 1.0884 and recommended making market entry decisions based on it. Let’s look at the 5-minute chart and understand what happened there. The euro did fall in the first half of the day, but due to low volatility and a lack of news, the pair could not reach 1.0884. For this reason, no entry signals were formed. The technical picture should have been reviewed for the second half of the day.
Requirements for opening long positions in EUR/USD:
Considering that the second half of the day promises to be even less volatile and trading volume will be even lower, it is unlikely that we will see good entry points into the market. Independence Day in the US is a public holiday for several markets, so it’s best to be patient until tomorrow and make considered decisions with major players rather than getting caught up in speculative manipulation.
In case of the pair’s decline, I will only act in the area of support at 1.0884, formed due to yesterday’s unsuccessful attempt by bears to crash the market. The formation of a false breakout there will give a buy signal, allowing a return to the quite significant resistance of 1.0933. A breakout and a top-down test of this range will strengthen demand for the euro, giving it a chance to break out to 1.0975, but this is unlikely. The farthest target remains the area of 1.1010, where I will fix the profit. Bears may continue to act more actively in anticipation of a downward correction in the scenario of the EUR/USD falling and the lack of buyers at 1.0884 due to the lack of important statistics in the second half of the day. Therefore, only the formation of a false breakout in the area of the next support at 1.0838 will give a signal to buy the euro. I will open long positions immediately on a rebound from the minimum of 1.0807 with the aim of an upward correction of 30-35 points within the day.
Requirements for opening short positions in EUR/USD:
Considering that the market volatility for euro sellers also does not have many scenarios: bears need to keep trading below 1.0933, and protecting this level will be a priority task for the second half of the day. An unsuccessful consolidation there will give a sell signal, capable of pushing EUR/USD to 1.0884. Consolidation below this range and a reverse test from bottom to top is a direct road to 1.0838. The farthest target will be the minimum of 1.0807, where I will fix the profit. In case of an upward movement of EUR/USD during the American session and the absence of bears at 1.0933, the situation will return under the control of buyers, and the pair will break out of the sideways channel. In this case, I will postpone short positions until the next resistance of 1.0975. It is also possible to sell there, but only after an unsuccessful consolidation. I will open short positions immediately on a rebound from the maximum of 1.1010 with the aim of a downward correction of 30-35 points.
In the COT (Commitment of Traders) report for June 27, there was a reduction in long and short positions, leaving the balance of power in the market virtually unchanged. Last week’s US GDP data once again confirmed the resilience of the American economy, even in the face of high-interest rates, allowing the Federal Reserve to continue to actively combat high inflation, which is gradually returning to normal. The minutes of the Fed meeting will be released soon, as well as the US labor market condition report, which could strengthen the American dollar against the euro. The optimal medium-term strategy in the current conditions remains purchases on the decline. The COT report indicated that non-commercial long positions decreased by 5,422 to 223,977, while non-commercial short positions dropped by 5,801 to 78,949. As a result of the week, the overall non-commercial net position slightly increased and was 145,028 compared to 144,025. The weekly closing price rose to 11006 compared to 1.0968.
Indicator signals:
Moving averages
Trading is conducted around the 30 and 50-day moving averages, indicating a market equilibrium.
Note: The author on the H1 chart considers the period and prices of moving averages and differ from the general definition of classical daily moving averages on the D1 chart.
Bollinger Bands
In case of growth, the upper border of the indicator will act as resistance at around 1.0920.
Indicator descriptions
• Moving average (smooths volatility and noise to determine the current trend). Period 50. It is marked in yellow on the chart.
• Moving average (smooths volatility and noise to determine the current trend). Period 30. It is 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 that use the futures market for speculative purposes and meet certain requirements.
• Non-commercial long positions represent the total open long position of non-commercial traders.
• Non-commercial short positions represent the total open short 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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