FX.co ★ EUR/USD: the plan for the American session on October 12 (analysis of morning deals). Another attempt by the bulls failed

In my morning forecast, I paid attention to the 0.9731 level and recommended deciding on entering the market there. Let's look at the 5-minute chart and figure out what happened there. As a result of the pair's growth to the area of 0.9731, the bulls failed to catch on to this level on the second attempt, which led to a sell signal and a downward movement of more than 30 points. However, we did not reach the nearest support of 0.9684. In the afternoon, the technical picture changed only slightly.

To open long positions on EURUSD, you need:

Today, a warm-up is expected in the form of data on the producer price index in the United States, which may lead to movement in the market - especially if the data exceeds economists' forecasts and shows growth. If this happens, the pressure on the pair will return, and we can see a test of the nearest support of 0.9679, the protection of which is almost the main task of euro buyers in the short term. Do not forget that the minutes of the Fed meeting is expected to be published today, at which interest rates were raised for the third time immediately by 0.75%. Let's see what the politicians talked about at the meeting and what conclusions they came to. Although without the protocol, there are enough objective reasons to bet on further tightening of monetary policy and an increase in interest rates. At the moment, only the protection of the 0.9679 support and the repeated formation of a false breakdown there, by analogy with the one we observed the day before, will lead to a signal to buy the euro with the aim of the pair's growth in the 0.9731 area. Consolidation above this range and a top-down test will cancel out all the morning efforts of the bears to control the market, which will lead to a buy signal and recovery in the area of 0.9774. A breakthrough in this area will also allow a direct road to 0.9809, which will seriously harm sellers' plans to maintain control over the market. With the option of a further decline in EUR/USD after the Fed data and protocol, a break of 0.9679 will quickly push the euro down to the next support of 0.9638. From this level, I recommend also buying only on a false breakdown. I advise you to open long positions on EUR/USD immediately for a rebound only from the minimum of 0.9592 or even lower – around 0.9540 – with the aim of an upward correction of 30-35 points within a day.

To open short positions on EURUSD, you need:

Sellers coped with the morning tasks and defended the nearest resistance of 0.9731. While trading will be conducted below this range, you can bet on a larger movement of the euro down to the lower border of the side channel. But do not forget that the bulls may again attempt to break 0.9731 by analogy with yesterday. The bears need to keep an eye on this level, especially. Only another false breakdown there will lead to a new sell signal with the prospect of a return to 0.9679.

Moreover, a breakout and consolidation below this range will create additional pressure on the euro. A reverse test from the bottom up will give a sell signal with the demolition of buyers' stop orders and the prospect of updating the 0.9638 minimum. A further goal will be the support of 0.9596, where I recommend fixing the profits. In the event of an upward movement of EUR/USD during the US session, as well as the absence of bears at 0.9731, buyers will gain an advantage, which will lead to a correction of the euro to the area of a maximum of 0.9774. There I advise you to sell also only on a false breakdown. It is possible to open short positions immediately for a rebound only from 0.9895 or even higher – from 0.9841 with the aim of a downward correction of 30-35 points.

The COT report (Commitment of Traders) for October 4 recorded a sharp reduction in both short and long positions. Many investors and major players now prefer a wait-and-see attitude, especially considering the point that geopolitical tensions have reached. Against this background, there is no doubt about the demand for the US dollar. If we add here the latest data on the US labor market and the expected September inflation: we can confidently say that the euro has not yet reached its final lows against the US dollar and that, in the near future, we can expect the final annual sale of risky assets. The COT report indicated that long non-profit positions decreased by 9,345 to 199,391, while short non-profit positions decreased by 19,230 to 155,709. At the end of the week, the total non-commercial net position remained positive and amounted to 43,682 against 33,797. This indicates that investors are taking advantage of the moment and continuing to buy the cheap euro below parity, as well as accumulate long positions to end the crisis and restore the pair in the long term. The weekly closing price recovered to 1.0053 against 0.9657.

Signals of indicators:

Moving Averages

Trading is conducted around the 30 and 50-day moving averages, which indicates market uncertainty that may persist until tomorrow.

Note: The author considers the period and prices of moving averages on the hourly chart H1 and differ from the general definition of the classic daily moving averages on the daily chart D1.

Bollinger Bands

In case of growth, the upper limit of the indicator around 0.9760 will act as resistance. In case of a decline, the lower border of the indicator in the area of 0.9679 will provide support.

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, use the futures market for speculative purposes and to 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.