To open long positions on EURUSD, you need:
In my morning forecast for the second half of the day, I paid attention to purchases from the level of 1.1617, which we did not reach. There were no signals to enter the market in the area of 1.1651, which indicates a wait-and-see position of traders before tomorrow's US elections and the Federal Reserve meeting this week. This situation is more likely to play into the hands of euro buyers, so in the afternoon I recommend taking a closer look at this scenario.
From a technical point of view, nothing much has changed. Buyers of the European currency still have the main task, which is to return the resistance of 1.1651 under their control. Given that the production figures were slightly better than economists' forecasts, the bulls managed to avoid a test of the minimum of 1.1617 and are now focused on the resistance of 1.1651. Only a consolidation above this level with a test of it from top to bottom will be a signal to open long positions in the expectation of recovery of EUR/USD to the resistance area of 1.1701, just below which are the moving averages that play on the side of buyers. In this case, the trade may move to the side channel. With growth above 1.1701, the bulls' goal will be a maximum of 1.1754, where I recommend fixing the profits. If the pressure on the euro persists in the second half of the day, and this will happen only in the case of very good data on the ISM manufacturing index in the US, you can only consider buying EUR/USD if there is a false breakdown at 1.1617. In case of bad macroeconomic statistics, I recommend postponing long positions only until the test of the next large minimum in the area of 1.1585, based on a correction of 15-20 points within the day.
To open short positions on EURUSD, you need to:
Sellers need to form a false breakout in the resistance area of 1.1651, which is gradually being smeared by the market. Therefore, you can rush to sell from this level after a confident formation of a false breakout there. If the signal is not very clear to you, it is best to refrain from opening short positions in the continuation of the emerging trend. If the pressure on the euro returns, the first target will be at least 1.1617, but I recommend taking profit only after the pair reaches the support of 1.1585. If the data on manufacturing activity in the US turns out to be worse than economists' forecasts, and the bears do not show activity in the resistance area of 1.1651, it is best to postpone sales until the test of Friday's high of 1.1701 or open short positions immediately for a rebound from the resistance of 1.1754, based on a correction of 15-20 points within the day.
Let me remind you that the COT report (Commitment of Traders) for October 27 recorded a reduction in both long and short positions. But despite this, buyers of risky assets believe in the continuation of the bull market and prefer to act cautiously. Thus, long non-profit positions fell from 229,878 to 217,443, while short non-profit positions also fell to 61,888 from 63,935. The total non-commercial net position fell to 155,555 from 165,943 a week earlier. However, bullish sentiment on the euro remains quite high in the medium term. The stronger the euro declines against the US dollar at the end of this year, the more attractive it will be for new investors, especially after the US presidential election, when additional pressure on the market on this issue will ease.
Signals of indicators:
Moving averages
Trading is below 30 and 50 daily moving averages, which indicates a further decline in the euro.
Note: The period and prices of moving averages are considered by the author on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.
Bollinger Bands
Volatility has decreased significantly, which does not give a signal to enter the market.
Description of indicators
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
- Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
- MACD indicator (Moving Average Convergence / Divergence - moving average convergence / divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
- Bollinger Bands (Bollinger Bands). Period 20
- Non-profit speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
- Long non-commercial positions represent the total long open position of non-commercial traders.
- Short non-commercial positions represent the total short open position of non-commercial traders.
- Total non-commercial net position is the difference between the short and long positions of non-commercial traders.
