EUR/USD: trading plan for the US session on October 9th (analysis of morning deals). Pressure on the euro is gradually returning
October 9, 2023 5:23 pm
In my morning forecast, I highlighted the level of 1.0535 and recommended making entry decisions based on it. Let’s take a look at the 5-minute chart and analyze what happened there. The drop and the formation of a false breakout at this level led to a buy signal for the euro, but there was no significant upward movement. As a result, I decided to exit the market and reassess the technical picture.
To open long positions on EUR/USD, the following is required:
Considering that there is no US data ahead, pressure on the euro may persist because expectations of an aggressive policy from the Federal Reserve (Fed) after Friday’s US labor market data have not disappeared. The euro is currently not in a position to dictate terms. I will act after the drop and the formation of a false breakout at 1.0514, similar to what I discussed earlier. This will provide a good entry point for long positions, aiming for a further upward correction. The target will be the new resistance at 1.0543, formed during the first half of the day. A breakthrough and a top-down test of this range will provide an opportunity for a leap to 1.0574. The ultimate target will be the area around 1.0609, where I will make a profit. In the event of a decline in EUR/USD and no activity at 1.0514 in the second half of the day, the pressure on the euro will only increase, and it will be time to start talking about a bearish market comeback. In this case, only the formation of a false breakout around 1.0486 will signal entry into the market. I will consider opening long positions from 1.0451 with the target of an upward correction of 30-35 points within the day.
To open short positions on EUR/USD, the following is required:
Sellers managed to push the euro down quite effectively in the first half of the day. Now, let’s see what they can offer during the American session. Only the defense of the nearest resistance at 1.0543 during the speeches of FOMC members Lori K. Logan, Michael S. Barr, and Philip N. Jefferson, as well as the formation of a false breakout there, will give a sell signal for the euro with a downward movement towards support at 1.0514. After a breakthrough and consolidation below this range, as well as a bottom-up retest, I expect to get another sell signal with a move to the minimum of 1.0486, where large buyers acted effectively last Friday. The ultimate target will be the area around 1.0451, where I will take a profit. In the event of an upward movement in EUR/USD during the American session and a lack of bears at 1.0543, which is likely to happen, buyers will have a chance for an upward correction. In this scenario, I will postpone short positions until the resistance at 1.0574. It can be sold, but only after an unsuccessful consolidation. I will consider opening short positions from 1.0609 with the target of a downward correction of 30-35 points.
In the Commitment of Traders (COT) report for September 26, both long and short positions increased. There were almost twice as many short positions. Negative changes in the Eurozone economy and the risk of further interest rate hikes by the ECB have all contributed to the ongoing bearish market. Statements by ECB President Christine Lagarde herself, rather than her representatives, also had a hawkish tone. Even news that inflation in the Eurozone slowed down in August did not help the euro withstand pressure from major sellers. However, the lower the pair goes, the more attractive it looks for medium-term purchases, as evidenced by the increase in long positions. In the COT report, it is indicated that non-commercial long positions increased by 4,092 to a level of 211,516, while non-commercial short positions increased by 7,674 to a level of 113,117. As a result, the spread between long and short positions increased by 1,216. The closing price decreased to 1.0604 from 1.0719, indicating a bearish market.
Indicator Signals:
Moving Averages
Trading is taking place below the 30 and 50-day moving averages, indicating an attempt by the bears to return to the market.
Note: The period and prices of the moving averages are considered by the author on the hourly chart H1 and differ from the general definition of classical daily moving averages on the daily chart D1.
Bollinger Bands
In the case of a decline, the lower boundary of the indicator around 1.0514 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 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 net non-commercial 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 highlighted the level of 1.0535 and recommended making entry decisions based on it. Let’s take a look at the 5-minute chart and analyze what happened there. The drop and the formation of a false breakout at this level led to a buy signal for the euro, but there was no significant upward movement. As a result, I decided to exit the market and reassess the technical picture.
To open long positions on EUR/USD, the following is required:
Considering that there is no US data ahead, pressure on the euro may persist because expectations of an aggressive policy from the Federal Reserve (Fed) after Friday’s US labor market data have not disappeared. The euro is currently not in a position to dictate terms. I will act after the drop and the formation of a false breakout at 1.0514, similar to what I discussed earlier. This will provide a good entry point for long positions, aiming for a further upward correction. The target will be the new resistance at 1.0543, formed during the first half of the day. A breakthrough and a top-down test of this range will provide an opportunity for a leap to 1.0574. The ultimate target will be the area around 1.0609, where I will make a profit. In the event of a decline in EUR/USD and no activity at 1.0514 in the second half of the day, the pressure on the euro will only increase, and it will be time to start talking about a bearish market comeback. In this case, only the formation of a false breakout around 1.0486 will signal entry into the market. I will consider opening long positions from 1.0451 with the target of an upward correction of 30-35 points within the day.
To open short positions on EUR/USD, the following is required:
Sellers managed to push the euro down quite effectively in the first half of the day. Now, let’s see what they can offer during the American session. Only the defense of the nearest resistance at 1.0543 during the speeches of FOMC members Lori K. Logan, Michael S. Barr, and Philip N. Jefferson, as well as the formation of a false breakout there, will give a sell signal for the euro with a downward movement towards support at 1.0514. After a breakthrough and consolidation below this range, as well as a bottom-up retest, I expect to get another sell signal with a move to the minimum of 1.0486, where large buyers acted effectively last Friday. The ultimate target will be the area around 1.0451, where I will take a profit. In the event of an upward movement in EUR/USD during the American session and a lack of bears at 1.0543, which is likely to happen, buyers will have a chance for an upward correction. In this scenario, I will postpone short positions until the resistance at 1.0574. It can be sold, but only after an unsuccessful consolidation. I will consider opening short positions from 1.0609 with the target of a downward correction of 30-35 points.
In the Commitment of Traders (COT) report for September 26, both long and short positions increased. There were almost twice as many short positions. Negative changes in the Eurozone economy and the risk of further interest rate hikes by the ECB have all contributed to the ongoing bearish market. Statements by ECB President Christine Lagarde herself, rather than her representatives, also had a hawkish tone. Even news that inflation in the Eurozone slowed down in August did not help the euro withstand pressure from major sellers. However, the lower the pair goes, the more attractive it looks for medium-term purchases, as evidenced by the increase in long positions. In the COT report, it is indicated that non-commercial long positions increased by 4,092 to a level of 211,516, while non-commercial short positions increased by 7,674 to a level of 113,117. As a result, the spread between long and short positions increased by 1,216. The closing price decreased to 1.0604 from 1.0719, indicating a bearish market.
Indicator Signals:
Moving Averages
Trading is taking place below the 30 and 50-day moving averages, indicating an attempt by the bears to return to the market.
Note: The period and prices of the moving averages are considered by the author on the hourly chart H1 and differ from the general definition of classical daily moving averages on the daily chart D1.
Bollinger Bands
In the case of a decline, the lower boundary of the indicator around 1.0514 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 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 net non-commercial 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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