EUR/USD: trading plan for the US session on October 2nd (analysis of morning deals)
October 2, 2023 3:22 pm
In my morning forecast, I drew attention to the level of 1.0585 and recommended making entry decisions based on it. Let’s take a look at the 5-minute chart and analyze what happened there. The rise and the formation of a false breakout led to a selling point for the euro, resulting in a drop of more than 40 points. The technical picture did not change in the second half of the day.
To open long positions on EUR/USD, the following is required:
The released data on activity in the eurozone countries, which continued to decline, especially in Germany, has further pushed the European currency down against the US dollar. Ahead of us are similar indicators, but for the United States. The ISM Manufacturing Index will determine the direction of the pair for the second half of the day, and good data will likely weaken the euro’s positions even further. Don’t forget about the speeches of Federal Reserve Chairman Jerome Powell, FOMC member Patrick T. Harker, and John Williams. Let’s see how the central bank representatives will react after Friday’s inflation data from the United States. If the market’s reaction leans towards a decrease in EUR/USD, I will act around the new support level of 1.0522, formed last Thursday. The formation of a false breakout there will provide a good entry point for long positions, with the expectation of an upward correction in the pair towards the intermediate resistance of 1.0552. A breakthrough and testing of this range from top to bottom will strengthen demand for the euro, offering a chance for a jump to 1.0585, from where we already saw a drop today. The ultimate target will be the area of 1.0615, where I will make a profit. In case of further decline in EUR/USD and a bearish reaction to the released data, and don’t forget that the downtrend is still in place, as well as the lack of activity at 1.0522, it’s best to postpone purchases until the formation of a false breakout around 1.0493—last month’s and this year’s minimum. I will open long positions from the rebound of 1.0439 with the target of an upward correction within the day, which will be in the range of 30-35 points.
To open short positions on EUR/USD, the following is required:
Sellers for the second trading day in a row are making it clear that they haven’t gone anywhere and that we may have a lot of interesting things ahead. Defending the nearest resistance at 1.0552, which I personally have little confidence in, as well as a false breakout there along with hawkish comments from Federal Reserve representatives—all of this will lead to a good entry point for selling with a downward movement towards the new low of 1.0522. Only after a breakthrough and consolidation below this range, as well as a reverse test from bottom to top, do I expect to receive another sell signal with the aim of reaching 1.0493. The ultimate target will be the area of 1.0439, which will return control to the sellers. In the event of an upward movement of EUR/USD during the US session and the absence of bears at 1.0552, buyers will have a chance to recover the pair. In such a scenario, I will postpone short positions until the new resistance at 1.0585. It’s possible to sell there, but only after an unsuccessful consolidation, similar to what I discussed above. I will open short positions from the rebound of 1.0615 with the target of a downward correction of 30-35 points.
The COT (Commitment of Traders) report for September 19 showed a sharp reduction in long positions and an increase in short ones. Negative changes in the eurozone economy, as well as the risk of further interest rate hikes by the ECB, have led to further development of the bear market. Not even the Fed’s decision to leave rates unchanged helped the euro, although it should be noted that the Fed officials clearly indicated that they do not rule out another increase in borrowing costs in the US by the end of this year. The COT report indicates that non-commercial long positions decreased by 4,952 to 207,424, while non-commercial short positions increased by 6,147 to 105,443. As a result, the spread between long and short positions narrowed by 8,290. The closing price fell to 1.0719 from 1.0736, indicating a bearish market.
Indicator signals:
Moving averages
Trading is conducted below the 30 and 50-day moving averages, indicating a decline in the pair.
Note: The author considers the period and prices of the moving averages on the hourly chart (H1), which differs from the general definition of classical daily moving averages on the daily chart (D1).
Bollinger Bands
In the case of a decrease, the lower boundary of the indicator around 1.0550 will act as support.
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 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 the short and long positions of non-commercial traders.The material has been provided by InstaForex Company – www.instaforex.com
In my morning forecast, I drew attention to the level of 1.0585 and recommended making entry decisions based on it. Let’s take a look at the 5-minute chart and analyze what happened there. The rise and the formation of a false breakout led to a selling point for the euro, resulting in a drop of more than 40 points. The technical picture did not change in the second half of the day.
To open long positions on EUR/USD, the following is required:
The released data on activity in the eurozone countries, which continued to decline, especially in Germany, has further pushed the European currency down against the US dollar. Ahead of us are similar indicators, but for the United States. The ISM Manufacturing Index will determine the direction of the pair for the second half of the day, and good data will likely weaken the euro’s positions even further. Don’t forget about the speeches of Federal Reserve Chairman Jerome Powell, FOMC member Patrick T. Harker, and John Williams. Let’s see how the central bank representatives will react after Friday’s inflation data from the United States. If the market’s reaction leans towards a decrease in EUR/USD, I will act around the new support level of 1.0522, formed last Thursday. The formation of a false breakout there will provide a good entry point for long positions, with the expectation of an upward correction in the pair towards the intermediate resistance of 1.0552. A breakthrough and testing of this range from top to bottom will strengthen demand for the euro, offering a chance for a jump to 1.0585, from where we already saw a drop today. The ultimate target will be the area of 1.0615, where I will make a profit. In case of further decline in EUR/USD and a bearish reaction to the released data, and don’t forget that the downtrend is still in place, as well as the lack of activity at 1.0522, it’s best to postpone purchases until the formation of a false breakout around 1.0493—last month’s and this year’s minimum. I will open long positions from the rebound of 1.0439 with the target of an upward correction within the day, which will be in the range of 30-35 points.
To open short positions on EUR/USD, the following is required:
Sellers for the second trading day in a row are making it clear that they haven’t gone anywhere and that we may have a lot of interesting things ahead. Defending the nearest resistance at 1.0552, which I personally have little confidence in, as well as a false breakout there along with hawkish comments from Federal Reserve representatives—all of this will lead to a good entry point for selling with a downward movement towards the new low of 1.0522. Only after a breakthrough and consolidation below this range, as well as a reverse test from bottom to top, do I expect to receive another sell signal with the aim of reaching 1.0493. The ultimate target will be the area of 1.0439, which will return control to the sellers. In the event of an upward movement of EUR/USD during the US session and the absence of bears at 1.0552, buyers will have a chance to recover the pair. In such a scenario, I will postpone short positions until the new resistance at 1.0585. It’s possible to sell there, but only after an unsuccessful consolidation, similar to what I discussed above. I will open short positions from the rebound of 1.0615 with the target of a downward correction of 30-35 points.
The COT (Commitment of Traders) report for September 19 showed a sharp reduction in long positions and an increase in short ones. Negative changes in the eurozone economy, as well as the risk of further interest rate hikes by the ECB, have led to further development of the bear market. Not even the Fed’s decision to leave rates unchanged helped the euro, although it should be noted that the Fed officials clearly indicated that they do not rule out another increase in borrowing costs in the US by the end of this year. The COT report indicates that non-commercial long positions decreased by 4,952 to 207,424, while non-commercial short positions increased by 6,147 to 105,443. As a result, the spread between long and short positions narrowed by 8,290. The closing price fell to 1.0719 from 1.0736, indicating a bearish market.
Indicator signals:
Moving averages
Trading is conducted below the 30 and 50-day moving averages, indicating a decline in the pair.
Note: The author considers the period and prices of the moving averages on the hourly chart (H1), which differs from the general definition of classical daily moving averages on the daily chart (D1).
Bollinger Bands
In the case of a decrease, the lower boundary of the indicator around 1.0550 will act as support.
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 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 the short and long positions of non-commercial traders.The material has been provided by InstaForex Company – www.instaforex.com
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