EUR/USD: trading plan for the US session on September 27th (analysis of morning deals). The euro continues to be sold
September 27, 2023 1:24 pm
In my morning forecast, I drew attention to the level of 1.0576 and recommended making trading decisions based on it. Let’s take a look at the 5-minute chart and analyze what happened there. The rise and formation of a false breakout led to an excellent selling entry point for the euro, which, at the time of writing this article, resulted in a drop of almost 20 points. In the second half of the day, the technical picture has not changed.
To open long positions on EUR/USD, the following is required:
Weak data from Germany and lending in the Eurozone prevented euro buyers from regaining control of the 1.0576 level, after which pressure on the pair returned. In the second half of the day, everyone will be waiting for data on changes in durable goods orders and the speech of FOMC member Neel Kashkari, who has been making aggressive statements about future monetary policy lately. However, even weak data from the United States, similar to yesterday, can be perceived as a reason to buy the US dollar against risky assets, especially against the backdrop of recent discussions about the onset of a recession in the United States. For this reason, I plan to act against the trend only on the decline to the nearest support level at 1.0545. The formation of a false breakout there will provide a good entry point for long positions, expecting an upward correction of the pair with the target of retesting the resistance at 1.0576, above which the moving averages, favouring sellers, are located. Only a breakout and retest of this range from top to bottom will revive demand for the euro, giving it a chance to surge to 1.0608. The ultimate target will be the area around 1.0643, where I will make a profit. In the scenario of a further EUR/USD decline and the absence of activity at 1.0545, which is more likely, the bearish trend will continue to develop. In this case, only the formation of a false breakout around 1.0520 will signal an entry into the market. I will open long positions only on a rebound from 1.0487, with the target of an upward correction within the day of 30-35 points.
To open short positions on EUR/USD, the following is required:
Obviously, after successfully defending 1.0576 in the morning, sellers continue to control the market. For the further development of the bearish market, they need good US statistics and a breakthrough of 1.0545. If, after the release of the data, we see an upward movement, the defence of the resistance at 1.0576, and a false breakout, it will all lead to a good entry point for selling with a downward movement to a new monthly minimum at 1.0545. Only after breaking and consolidating below this range, as well as a bottom-up retest, do I expect to get another selling signal with the aim of reaching 1.0520, where I anticipate the presence of larger buyers. The ultimate target will be the area around 1.0487, where I will make a profit. In the event of an upward movement of EUR/USD during the American session and the absence of bears at 1.0576, buyers will have a good chance of a pair recovery. In this case, I will postpone short positions until a new resistance level of 1.0608, from which the euro fell once yesterday. It can be sold there, but only after an unsuccessful consolidation. I will open short positions only on a rebound from the maximum of 1.0643, with the aim of a downward correction of 30-35 points.
In the COT report (Commitment of Traders) for September 19, there was 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 the further development of the bearish market. Not even the decision of the Fed to leave interest rates unchanged helped the euro, although it should be noted that the Fed officials made it clear that they do not rule out another increase in borrowing costs in the United States 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 decreased 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 further 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 an uptrend, the upper boundary of the indicator around 1.0576 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 9Bollinger 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 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 drew attention to the level of 1.0576 and recommended making trading decisions based on it. Let’s take a look at the 5-minute chart and analyze what happened there. The rise and formation of a false breakout led to an excellent selling entry point for the euro, which, at the time of writing this article, resulted in a drop of almost 20 points. In the second half of the day, the technical picture has not changed.
To open long positions on EUR/USD, the following is required:
Weak data from Germany and lending in the Eurozone prevented euro buyers from regaining control of the 1.0576 level, after which pressure on the pair returned. In the second half of the day, everyone will be waiting for data on changes in durable goods orders and the speech of FOMC member Neel Kashkari, who has been making aggressive statements about future monetary policy lately. However, even weak data from the United States, similar to yesterday, can be perceived as a reason to buy the US dollar against risky assets, especially against the backdrop of recent discussions about the onset of a recession in the United States. For this reason, I plan to act against the trend only on the decline to the nearest support level at 1.0545. The formation of a false breakout there will provide a good entry point for long positions, expecting an upward correction of the pair with the target of retesting the resistance at 1.0576, above which the moving averages, favouring sellers, are located. Only a breakout and retest of this range from top to bottom will revive demand for the euro, giving it a chance to surge to 1.0608. The ultimate target will be the area around 1.0643, where I will make a profit. In the scenario of a further EUR/USD decline and the absence of activity at 1.0545, which is more likely, the bearish trend will continue to develop. In this case, only the formation of a false breakout around 1.0520 will signal an entry into the market. I will open long positions only on a rebound from 1.0487, with the target of an upward correction within the day of 30-35 points.
To open short positions on EUR/USD, the following is required:
Obviously, after successfully defending 1.0576 in the morning, sellers continue to control the market. For the further development of the bearish market, they need good US statistics and a breakthrough of 1.0545. If, after the release of the data, we see an upward movement, the defence of the resistance at 1.0576, and a false breakout, it will all lead to a good entry point for selling with a downward movement to a new monthly minimum at 1.0545. Only after breaking and consolidating below this range, as well as a bottom-up retest, do I expect to get another selling signal with the aim of reaching 1.0520, where I anticipate the presence of larger buyers. The ultimate target will be the area around 1.0487, where I will make a profit. In the event of an upward movement of EUR/USD during the American session and the absence of bears at 1.0576, buyers will have a good chance of a pair recovery. In this case, I will postpone short positions until a new resistance level of 1.0608, from which the euro fell once yesterday. It can be sold there, but only after an unsuccessful consolidation. I will open short positions only on a rebound from the maximum of 1.0643, with the aim of a downward correction of 30-35 points.
In the COT report (Commitment of Traders) for September 19, there was 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 the further development of the bearish market. Not even the decision of the Fed to leave interest rates unchanged helped the euro, although it should be noted that the Fed officials made it clear that they do not rule out another increase in borrowing costs in the United States 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 decreased 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 further 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 an uptrend, the upper boundary of the indicator around 1.0576 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 9Bollinger 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 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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