EUR/USD: trading plan for the US session on September 8th (analysis of morning deals). The euro is ready to return to monthly
September 8, 2023 2:22 pm
In my morning forecast, I drew attention to the level of 1.0709 and recommended making trading decisions based on it. Let’s look at the 5-minute chart and analyze what happened there. A decrease and the formation of a false breakout around 1.0709 signaled a euro buy opportunity, but in conditions of low volatility and the absence of Eurozone statistics, it never materialized. The technical picture was reevaluated for the second half of the day.
To open long positions on EUR/USD, the following is required:
Considering that nothing during the American session would push the pair beyond the sideways range, I decided to review the nearest support and resistance levels. I also expect low volatility and trading volume, and I do not plan to enter the market based on false entry points at the end of the week. Only a drop to 1.0689 and the formation of a false breakout there will confirm a suitable entry point for long positions, targeting a rebound towards 1.0728. A breakthrough and a top-down test of this range are unlikely to occur, so only weak US lending statistics and a tough stance by Barr, combined with a firm move above 1.0728, will revive demand for the euro, providing an opportunity to surge to 1.0748. The farthest target will be the 1.0772 area, where I will take profit. In the scenario of EUR/USD declining and no activity around 1.0689 in the second half of the day, the bears will maintain market control. Only a false breakout formation around 1.0665 will signal a euro buy opportunity in such a case. I will open long positions only after a rebound from 1.0637 with the target of a 30-35 point intraday uptrend correction.
To open short positions on EUR/USD, the following is required:
Sellers are targeting 1.0689, but it’s best to sell as high as possible at the end of the week, preferably on a false breakout around 1.0728. Only this will provide a selling signal, opening the way back to the support area of 1.0689. After breaking and firmly settling below this range, as well as a bottom-up retest, I expect to receive another signal targeting 1.0665, where I anticipate the presence of larger buyers. The farthest target will be the 1.0637 area, where I will take profit. In the event of an upward move of EUR/USD during the American session and the absence of bears at 1.0728, the bulls will have a chance to build an upward correction against the bearish market at the end of the week. In such a scenario, I will postpone short positions until the new resistance level of 1.0748. Selling can be considered there, but only after a failed breakout. I will open short positions immediately on a rebound from 1.0772 with a 30-35 point downward correction target.
In the COT report (Commitment of Traders) for August 29th, there was a reduction in long positions and an increase in short positions. Such market changes reflect the hawkish comments of Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium. Recently released data on US personal consumption expenditures and the labor market convinced investors that the Fed will need to raise rates again, maintaining the attractiveness of the US dollar. Paradoxically, the euro’s decline is quite an interesting moment, and buying risk assets on the decline remains the optimal medium-term strategy in the current conditions. The COT report indicated that non-commercial long positions decreased by 8,849 to 230,542, while non-commercial short positions increased by 3,232 to 83,863. As a result, the spread between long and short positions grew by 4,753. The closing price decreased to 1.0882 from 1.0866, indicating a bearish market.
Indicator signals:
Moving averages
Trading occurs around the 30 and 50-day moving averages, indicating a sideways market.
Note: The author considers the period and prices of the moving averages on the hourly H1 chart and differs from the general definition of classic daily moving averages on the daily D1 chart.
Bollinger Bands
In case of an uptrend, the upper boundary of the indicator around 1.0728 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 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 total non-commercial net position is the difference between non-commercial traders’ short and long positions.
The material has been provided by InstaForex Company – www.instaforex.com
In my morning forecast, I drew attention to the level of 1.0709 and recommended making trading decisions based on it. Let’s look at the 5-minute chart and analyze what happened there. A decrease and the formation of a false breakout around 1.0709 signaled a euro buy opportunity, but in conditions of low volatility and the absence of Eurozone statistics, it never materialized. The technical picture was reevaluated for the second half of the day.
To open long positions on EUR/USD, the following is required:
Considering that nothing during the American session would push the pair beyond the sideways range, I decided to review the nearest support and resistance levels. I also expect low volatility and trading volume, and I do not plan to enter the market based on false entry points at the end of the week. Only a drop to 1.0689 and the formation of a false breakout there will confirm a suitable entry point for long positions, targeting a rebound towards 1.0728. A breakthrough and a top-down test of this range are unlikely to occur, so only weak US lending statistics and a tough stance by Barr, combined with a firm move above 1.0728, will revive demand for the euro, providing an opportunity to surge to 1.0748. The farthest target will be the 1.0772 area, where I will take profit. In the scenario of EUR/USD declining and no activity around 1.0689 in the second half of the day, the bears will maintain market control. Only a false breakout formation around 1.0665 will signal a euro buy opportunity in such a case. I will open long positions only after a rebound from 1.0637 with the target of a 30-35 point intraday uptrend correction.
To open short positions on EUR/USD, the following is required:
Sellers are targeting 1.0689, but it’s best to sell as high as possible at the end of the week, preferably on a false breakout around 1.0728. Only this will provide a selling signal, opening the way back to the support area of 1.0689. After breaking and firmly settling below this range, as well as a bottom-up retest, I expect to receive another signal targeting 1.0665, where I anticipate the presence of larger buyers. The farthest target will be the 1.0637 area, where I will take profit. In the event of an upward move of EUR/USD during the American session and the absence of bears at 1.0728, the bulls will have a chance to build an upward correction against the bearish market at the end of the week. In such a scenario, I will postpone short positions until the new resistance level of 1.0748. Selling can be considered there, but only after a failed breakout. I will open short positions immediately on a rebound from 1.0772 with a 30-35 point downward correction target.
In the COT report (Commitment of Traders) for August 29th, there was a reduction in long positions and an increase in short positions. Such market changes reflect the hawkish comments of Federal Reserve Chairman Jerome Powell at the Jackson Hole Symposium. Recently released data on US personal consumption expenditures and the labor market convinced investors that the Fed will need to raise rates again, maintaining the attractiveness of the US dollar. Paradoxically, the euro’s decline is quite an interesting moment, and buying risk assets on the decline remains the optimal medium-term strategy in the current conditions. The COT report indicated that non-commercial long positions decreased by 8,849 to 230,542, while non-commercial short positions increased by 3,232 to 83,863. As a result, the spread between long and short positions grew by 4,753. The closing price decreased to 1.0882 from 1.0866, indicating a bearish market.
Indicator signals:
Moving averages
Trading occurs around the 30 and 50-day moving averages, indicating a sideways market.
Note: The author considers the period and prices of the moving averages on the hourly H1 chart and differs from the general definition of classic daily moving averages on the daily D1 chart.
Bollinger Bands
In case of an uptrend, the upper boundary of the indicator around 1.0728 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 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 total non-commercial net position is the difference between non-commercial traders’ short and long positions.
The material has been provided by InstaForex Company – www.instaforex.com
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