EUR/USD: trading plan for the US session on June 28 (analysis of morning deals). The euro remains unchanged
June 28, 2023 11:23 am
In my morning forecast, I highlighted the level of 1.0930 and recommended making entry decisions based on it. Let’s examine the 5-minute chart and analyze the events that unfolded. Due to low market volatility, the pair could not reach the designated level. As a result, no market entry signals were generated during the first half of the day. The technical picture remained unchanged for the second half.
To initiate long positions on EUR/USD:
The lending data in the Eurozone failed to impress traders, and the focus now shifts to American statistics. The release of figures on the balance of trade in goods and changes in wholesale inventories is not of significant importance, so attention is likely directed toward the speech by Federal Reserve Chairman Jerome Powell. However, it is unlikely that any extraordinary developments will occur as Powell’s speech is not expected to touch on future monetary policy.
Considering this, I plan to follow the morning forecast. A decline and a false breakout at 1.0930 would provide a new buying signal, allowing the pair to resume its upward movement with a target of 1.0974. Breaking through and testing this range from top to bottom would strengthen the demand for the euro and offer a chance to reach the monthly high of 1.1010. The ultimate target remains around 1.1060, where I plan to take profits. If strong US statistics lead to a decline in EUR/USD and a lack of buyers at 1.0930, pressure on EUR/USD will increase in the middle of the week. In such a scenario, only a false breakout around the next support at 1.0890 would provide a signal to buy the euro. I will open long positions immediately upon a rebound from the minimum of 1.0846, aiming for a 30-35 point upward correction within the day.
To initiate short positions on EUR/USD:
Sellers attempted to push the price down towards the 1.0930 area but were unsuccessful. Therefore, I prefer to act only on the rise and false breakout around the morning resistance at 1.0974. An unsuccessful consolidation at that level would provide a selling signal capable of pushing EUR/USD back to 1.0930, which serves as support based on yesterday’s performance and plays a crucial role in the short-term perspective. If this range is broken and subsequently tested from below to above, it would directly lead to 1.0890. The ultimate target for short positions would be the minimum of 1.0846, where I would take profits.
If EUR/USD rises during the American session and there are no bearish signals at 1.0974, bulls may attempt to regain market control. In such a case, I would postpone opening short positions until the next resistance at 1.1010. Selling could also be considered there, but only after an unsuccessful consolidation. I would open short positions immediately upon a rebound from the peak of 1.1060, targeting a 30-35 point downward correction.
In the COT (Commitment of Traders) report for June 13, there was a decrease in both long and short positions. However, it should be noted that the report was released before the Federal Reserve decided on interest rates, which remained unchanged in June, significantly impacting the balance of power in the market. Hence, the current report is free of special attention. What is crucial is that the demand for the euro has been maintained due to the European Central Bank’s further aggressive policies and is expected to continue. In the current conditions, the optimal medium-term strategy would be to buy on declines. The COT report shows that non-commercial long positions decreased by 9,922 to 226,138, while non-commercial short positions fell by 3,323 to 74,316. The overall non-commercial net position decreased from 158,224 to 151,822. The weekly closing price increased from 1.0702 to 1.0794.
Indicator signals:
Moving Averages
Trading occurs around the 30-day and 50-day moving averages, indicating market uncertainty.
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 1.0975 will act as resistance.
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) 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 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 net non-commercial position is the difference between non-commercial traders’ short and long positions.
The material has been provided by InstaForex Company – www.instaforex.com
To initiate long positions on EUR/USD:
The lending data in the Eurozone failed to impress traders, and the focus now shifts to American statistics. The release of figures on the balance of trade in goods and changes in wholesale inventories is not of significant importance, so attention is likely directed toward the speech by Federal Reserve Chairman Jerome Powell. However, it is unlikely that any extraordinary developments will occur as Powell’s speech is not expected to touch on future monetary policy.
Considering this, I plan to follow the morning forecast. A decline and a false breakout at 1.0930 would provide a new buying signal, allowing the pair to resume its upward movement with a target of 1.0974. Breaking through and testing this range from top to bottom would strengthen the demand for the euro and offer a chance to reach the monthly high of 1.1010. The ultimate target remains around 1.1060, where I plan to take profits. If strong US statistics lead to a decline in EUR/USD and a lack of buyers at 1.0930, pressure on EUR/USD will increase in the middle of the week. In such a scenario, only a false breakout around the next support at 1.0890 would provide a signal to buy the euro. I will open long positions immediately upon a rebound from the minimum of 1.0846, aiming for a 30-35 point upward correction within the day.
To initiate short positions on EUR/USD:
Sellers attempted to push the price down towards the 1.0930 area but were unsuccessful. Therefore, I prefer to act only on the rise and false breakout around the morning resistance at 1.0974. An unsuccessful consolidation at that level would provide a selling signal capable of pushing EUR/USD back to 1.0930, which serves as support based on yesterday’s performance and plays a crucial role in the short-term perspective. If this range is broken and subsequently tested from below to above, it would directly lead to 1.0890. The ultimate target for short positions would be the minimum of 1.0846, where I would take profits.
If EUR/USD rises during the American session and there are no bearish signals at 1.0974, bulls may attempt to regain market control. In such a case, I would postpone opening short positions until the next resistance at 1.1010. Selling could also be considered there, but only after an unsuccessful consolidation. I would open short positions immediately upon a rebound from the peak of 1.1060, targeting a 30-35 point downward correction.
In the COT (Commitment of Traders) report for June 13, there was a decrease in both long and short positions. However, it should be noted that the report was released before the Federal Reserve decided on interest rates, which remained unchanged in June, significantly impacting the balance of power in the market. Hence, the current report is free of special attention. What is crucial is that the demand for the euro has been maintained due to the European Central Bank’s further aggressive policies and is expected to continue. In the current conditions, the optimal medium-term strategy would be to buy on declines. The COT report shows that non-commercial long positions decreased by 9,922 to 226,138, while non-commercial short positions fell by 3,323 to 74,316. The overall non-commercial net position decreased from 158,224 to 151,822. The weekly closing price increased from 1.0702 to 1.0794.
Indicator signals:
Moving Averages
Trading occurs around the 30-day and 50-day moving averages, indicating market uncertainty.
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 1.0975 will act as resistance.
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) 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 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 net non-commercial position is the difference between non-commercial traders’ short and long positions.
The material has been provided by InstaForex Company – www.instaforex.com