EUR/USD: trading plan for the US session on May 27th (analysis of morning deals). The euro is trying to continue its growth
May 27, 2024 12:22 pm
In my morning forecast, I paid attention to the 1.0861 level and planned to make decisions about entering the market from it. Let’s look at the 5-minute chart and figure out what happened there. The growth and formation of a false breakdown there led to a signal to sell the euro, which, at the time of writing, resulted in only a 10-point drop in the pair. In the afternoon, the technical picture was revised.
To open long positions on EURUSD, you need:
Since buyers have eroded the morning resistance of 1.0861, the focus has shifted to completely new levels. The German data kept the market in balance, as the IFO indices showed contradictory dynamics. However, in the second half, there are no statistics on the United States, so euro buyers may continue to get on sellers’ nerves. However, in the current situation, the optimal strategy for me will be to buy on a decline of 1.0846 – the support formed at the end of the first half of the day. I will open long positions there only after the formation of a false breakdown, which will be a suitable option to enter the market based on growth and a test of a new resistance of 1.0874. A breakout and a top-down update of this range will strengthen the pair with a chance of building a new uptrend and a breakthrough to 1.0894. The farthest target will be a maximum of 1.0918, where I will record profits. With the option of a decrease in EUR/USD and a lack of activity in the 1.0846 area in the afternoon, and there are also moving averages playing on the buyers’ side, the pressure on the market will return, which will lead to a larger drop in the pair to the 1.0820 area. I will also enter there only after the formation of a false breakdown. I plan to open long positions immediately for a rebound from 1.0796 with the aim of an upward correction of 30-35 points within the day.
To open short positions on EURUSD, you need:
Sellers have chances to bring the market back under control, but first, it would be nice to declare themselves in the resistance area of 1.0874, where the pair is heading now. By analogy with what I discussed above, only a false breakdown there will give an entry point into new short positions with the prospect of a decline in the euro and an update to the support of 1.0846, which the bulls managed to hold during European trading. A breakout and consolidation below this range and a reverse bottom-up test will give another selling point, with the pair moving to the low of 1.0820, where I expect to see a more active manifestation of buyers. The farthest target will be a minimum of 1.0796, where I will record profits. In the event of an upward movement of EUR/USD in the afternoon and the absence of bears at 1.0874, buyers will be able to regain the market. In this case, I will postpone sales until the next resistance test at 1.0894. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately for a rebound from 1.0918 with the aim of a downward correction of 30-35 points.
The COT report (Commitment of Traders) for May 14 showed an increase in long positions and a reduction in short ones. It is evident that recent statements by representatives of the European Central Bank regarding possible scenarios for lowering interest rates, as well as good figures indicating a continued slowdown in price pressure in the region, were interpreted in favor of buying risky assets. However, lower rates may put pressure on the euro. However, now everyone is talking more about the need to restore the economy through its stimulation so that the growth of the euro, in case of a softening of the cost of borrowing, will be ensured in the medium term. The COT report indicates that long non-profit positions increased by 7,804 to 178,398, while short non-profit positions collapsed by 4,761 to 161,243. As a result, the spread between long and short positions fell by 1,089.
Indicator signals:
Moving Averages
Trading is conducted above the 30 and 50-day moving averages, indicating further pair growth.
Note: The period and prices of the moving averages considered by the author are on the hourly H1 chart and differ from the classical daily moving averages on the D1 chart.
Bollinger Bands
In the case of a decline, the lower boundary of the indicator, around 1.0840, will serve as support.
Indicator Descriptions:
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 (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 large institutions that use the futures market for speculative purposes and meet certain requirements.
Long non-commercial positions: The total long open positions of non-commercial traders.
Short non-commercial positions: The total short open positions of non-commercial traders.
Total non-commercial net position: 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 1.0861 level and planned to make decisions about entering the market from it. Let’s look at the 5-minute chart and figure out what happened there. The growth and formation of a false breakdown there led to a signal to sell the euro, which, at the time of writing, resulted in only a 10-point drop in the pair. In the afternoon, the technical picture was revised.
To open long positions on EURUSD, you need:
Since buyers have eroded the morning resistance of 1.0861, the focus has shifted to completely new levels. The German data kept the market in balance, as the IFO indices showed contradictory dynamics. However, in the second half, there are no statistics on the United States, so euro buyers may continue to get on sellers’ nerves. However, in the current situation, the optimal strategy for me will be to buy on a decline of 1.0846 – the support formed at the end of the first half of the day. I will open long positions there only after the formation of a false breakdown, which will be a suitable option to enter the market based on growth and a test of a new resistance of 1.0874. A breakout and a top-down update of this range will strengthen the pair with a chance of building a new uptrend and a breakthrough to 1.0894. The farthest target will be a maximum of 1.0918, where I will record profits. With the option of a decrease in EUR/USD and a lack of activity in the 1.0846 area in the afternoon, and there are also moving averages playing on the buyers’ side, the pressure on the market will return, which will lead to a larger drop in the pair to the 1.0820 area. I will also enter there only after the formation of a false breakdown. I plan to open long positions immediately for a rebound from 1.0796 with the aim of an upward correction of 30-35 points within the day.
To open short positions on EURUSD, you need:
Sellers have chances to bring the market back under control, but first, it would be nice to declare themselves in the resistance area of 1.0874, where the pair is heading now. By analogy with what I discussed above, only a false breakdown there will give an entry point into new short positions with the prospect of a decline in the euro and an update to the support of 1.0846, which the bulls managed to hold during European trading. A breakout and consolidation below this range and a reverse bottom-up test will give another selling point, with the pair moving to the low of 1.0820, where I expect to see a more active manifestation of buyers. The farthest target will be a minimum of 1.0796, where I will record profits. In the event of an upward movement of EUR/USD in the afternoon and the absence of bears at 1.0874, buyers will be able to regain the market. In this case, I will postpone sales until the next resistance test at 1.0894. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately for a rebound from 1.0918 with the aim of a downward correction of 30-35 points.
The COT report (Commitment of Traders) for May 14 showed an increase in long positions and a reduction in short ones. It is evident that recent statements by representatives of the European Central Bank regarding possible scenarios for lowering interest rates, as well as good figures indicating a continued slowdown in price pressure in the region, were interpreted in favor of buying risky assets. However, lower rates may put pressure on the euro. However, now everyone is talking more about the need to restore the economy through its stimulation so that the growth of the euro, in case of a softening of the cost of borrowing, will be ensured in the medium term. The COT report indicates that long non-profit positions increased by 7,804 to 178,398, while short non-profit positions collapsed by 4,761 to 161,243. As a result, the spread between long and short positions fell by 1,089.
Indicator signals:
Moving Averages
Trading is conducted above the 30 and 50-day moving averages, indicating further pair growth.
Note: The period and prices of the moving averages considered by the author are on the hourly H1 chart and differ from the classical daily moving averages on the D1 chart.
Bollinger Bands
In the case of a decline, the lower boundary of the indicator, around 1.0840, will serve as support.
Indicator Descriptions:
The material has been provided by InstaForex Company – www.instaforex.com
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