EUR/USD: trading plan for the US session on November 6th (analysis of morning deals). The euro continues to rise
November 6, 2023 1:20 pm
In my morning forecast, I pointed out the level of 1.0748 and recommended using it as a reference for market entry decisions. Let’s examine the 5-minute chart and analyze what happened there. The rise and the formation of a false breakout occurred at this level, but as you can see, there are very few sellers willing to sell the euro. Considering that there was no rapid downward movement following the divergence after updating the daily high, I decided to exit the market. The technical picture for the second half of the day was only partially revised.
To open long positions on EUR/USD:
Euro sellers ignored the weak PMI data for the Eurozone services sector. As long as trading continues above 1.0748, the chances of the pair’s growth will be preserved. Given the absence of statistics in the second half of the day and the speech of FOMC member Lisa D. Cook, the euro’s rise may continue at any moment. A false breakout formation around 1.0748 and another unsuccessful attempt by sellers to re-enter the market will provide a good entry point for long positions, expecting further recovery of the pair with a test of resistance at 1.0774. Breaking and updating this range from top to bottom will provide an opportunity for another surge with an update to the maximum of 1.0798, where I will take a profit. The ultimate target will be the area of 1.0825. In the case of a decline in EUR/USD and a lack of activity at 1.0748, which is possible as there are not many eager to buy euros at current highs, the pressure on the pair will return, leading to a larger downward movement towards 1.0724. Only a false breakout will signal an entry into the market. I will open long positions on a rebound from 1.0695 with the target of a 30-35 point upward correction within the day.
To open short positions on EUR/USD:
Sellers continue to attempt to stop the bull market, but they are not doing well. The level where I expect the presence of major players is in the area of 1.0774. Only a false breakout there, along with hawkish comments from Federal Reserve representatives, will provide a sell signal with a downward movement towards the nearest support at 1.0724. After breaking and consolidating below this range, as well as a bottom-to-top retest, I expect to receive another sell signal with an exit at 1.0695, where the moving averages, favoring buyers, intersect. The ultimate goal will be a minimum of 1.0669, where I will take profit. In the event of an upward movement in EUR/USD during the American session and a lack of bears at 1.0774, which seems to be the case right now, buyers will likely try to reach the resistance at 1.0798. You can sell there, but only after an unsuccessful consolidation and a false breakout. I will open short positions right away on a rebound from the maximum of 1.0825 with the goal of a 30-35 point downward correction.
In the Commitment of Traders (COT) report for October 24, there was an increase in long positions and a decrease in short positions. Since everyone expected the European Central Bank to stop raising interest rates, its decision did not have a significant impact on the market’s balance, and as we can see, it slightly helped the Euro recover its position against the dollar. This week, the Federal Reserve System of the United States will hold a meeting where they are expected to make similar decisions to keep their policies unchanged. However, given the weak data from the United States, it is not excluded that the committee members will hint at the possibility of one more rate hike in December this year, which will strengthen the dollar. The COT report indicates that long non-commercial positions increased by 1,256 to a level of 215,569, while short non-commercial positions decreased by 1,587 to a level of 130,316. As a result, the spread between long and short positions decreased by 1,350. The closing price increased and reached 1.0613 against 1.0596, confirming the upward correction of the euro.
Indicator Signals:
Moving Averages
Trading is conducted above the 30 and 50-day moving averages, indicating the potential for further euro growth.
Note: The author considers the period and prices of moving averages on the hourly chart H1, which differs from the standard definition of daily moving averages on the daily chart D1.
Bollinger Bands
In the event of a decline, the lower boundary of the indicator around 1.0724 will act as support.
Indicator Descriptions:
• Moving Average (determines the current trend by smoothing volatility and noise). Period 50. Marked on the chart in yellow.
• Moving Average (determines the current trend by smoothing volatility and noise). Period 30. Marked on the chart in green.
• 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, who use the futures market for speculative purposes and meet certain requirements.
• Long non-commercial positions represent the total long open positions of non-commercial traders.
• Short non-commercial positions represent the total short open positions 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 pointed out the level of 1.0748 and recommended using it as a reference for market entry decisions. Let’s examine the 5-minute chart and analyze what happened there. The rise and the formation of a false breakout occurred at this level, but as you can see, there are very few sellers willing to sell the euro. Considering that there was no rapid downward movement following the divergence after updating the daily high, I decided to exit the market. The technical picture for the second half of the day was only partially revised.
To open long positions on EUR/USD:
Euro sellers ignored the weak PMI data for the Eurozone services sector. As long as trading continues above 1.0748, the chances of the pair’s growth will be preserved. Given the absence of statistics in the second half of the day and the speech of FOMC member Lisa D. Cook, the euro’s rise may continue at any moment. A false breakout formation around 1.0748 and another unsuccessful attempt by sellers to re-enter the market will provide a good entry point for long positions, expecting further recovery of the pair with a test of resistance at 1.0774. Breaking and updating this range from top to bottom will provide an opportunity for another surge with an update to the maximum of 1.0798, where I will take a profit. The ultimate target will be the area of 1.0825. In the case of a decline in EUR/USD and a lack of activity at 1.0748, which is possible as there are not many eager to buy euros at current highs, the pressure on the pair will return, leading to a larger downward movement towards 1.0724. Only a false breakout will signal an entry into the market. I will open long positions on a rebound from 1.0695 with the target of a 30-35 point upward correction within the day.
To open short positions on EUR/USD:
Sellers continue to attempt to stop the bull market, but they are not doing well. The level where I expect the presence of major players is in the area of 1.0774. Only a false breakout there, along with hawkish comments from Federal Reserve representatives, will provide a sell signal with a downward movement towards the nearest support at 1.0724. After breaking and consolidating below this range, as well as a bottom-to-top retest, I expect to receive another sell signal with an exit at 1.0695, where the moving averages, favoring buyers, intersect. The ultimate goal will be a minimum of 1.0669, where I will take profit. In the event of an upward movement in EUR/USD during the American session and a lack of bears at 1.0774, which seems to be the case right now, buyers will likely try to reach the resistance at 1.0798. You can sell there, but only after an unsuccessful consolidation and a false breakout. I will open short positions right away on a rebound from the maximum of 1.0825 with the goal of a 30-35 point downward correction.
In the Commitment of Traders (COT) report for October 24, there was an increase in long positions and a decrease in short positions. Since everyone expected the European Central Bank to stop raising interest rates, its decision did not have a significant impact on the market’s balance, and as we can see, it slightly helped the Euro recover its position against the dollar. This week, the Federal Reserve System of the United States will hold a meeting where they are expected to make similar decisions to keep their policies unchanged. However, given the weak data from the United States, it is not excluded that the committee members will hint at the possibility of one more rate hike in December this year, which will strengthen the dollar. The COT report indicates that long non-commercial positions increased by 1,256 to a level of 215,569, while short non-commercial positions decreased by 1,587 to a level of 130,316. As a result, the spread between long and short positions decreased by 1,350. The closing price increased and reached 1.0613 against 1.0596, confirming the upward correction of the euro.
Indicator Signals:
Moving Averages
Trading is conducted above the 30 and 50-day moving averages, indicating the potential for further euro growth.
Note: The author considers the period and prices of moving averages on the hourly chart H1, which differs from the standard definition of daily moving averages on the daily chart D1.
Bollinger Bands
In the event of a decline, the lower boundary of the indicator around 1.0724 will act as support.
Indicator Descriptions:
• Moving Average (determines the current trend by smoothing volatility and noise). Period 50. Marked on the chart in yellow.
• Moving Average (determines the current trend by smoothing volatility and noise). Period 30. Marked on the chart in green.
• 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, who use the futures market for speculative purposes and meet certain requirements.
• Long non-commercial positions represent the total long open positions of non-commercial traders.
• Short non-commercial positions represent the total short open positions 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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