FX.co ★ EUR/USD: trading plan for the US session on March 13 (analysis of morning deals)

I focused on the 1.0731 level in my morning forecast and suggested making considerations about joining the market from there. Let's take a look at the 5-minute chart and see what happened. We were able to receive a signal to sell the euro thanks to growth and a false breakout at this level, which caused a decline of more than 60 points. A false breakout at this level created a reverse buy signal, which was used to support the bulls' successful defense of 1.0666. The pair has currently gained roughly 30 points. The technical situation has not changed for the second half of the day.

If you want to trade long positions on EUR/USD, you will need:

German bonds experienced the largest rally in history, and traders revised their expectations and returned to safe-haven assets betting that the failure of one of the Silicon Valley banks would force politicians to raise borrowing costs more gradually than previously anticipated at the end of last week. As a result, the euro collapsed and the US dollar regained some of its positions in the first half of the day. And the European Central Bank is also a topic of discussion right now, in addition to the Federal Reserve. A significant decline in the value of the euro was also caused by the reduction of the peak interest rates in the eurozone from 4.2% to 3.5%. We will carefully watch what is occurring in the bond market and the foreign exchange market as there are no statistics for the afternoon of this day. The best scenario for buying if the pair continues to decline is when it reaches the support level of 1.0666. But since it has already been tried and proven effective today, only the subsequent occurrence of a false collapse there will serve as a signal to enter the market and attempt to rebound to the resistance of 1.0699, which serves as a support in the morning. With a move to 1.0731, where bulls will struggle, a breakthrough and top-down test of this level against the background of a new bond market imbalance create another entry point for long positions. Only if some extraordinary choices are taken during the Eurogroup meeting would the price of 1.0731 falls. This will defeat the stop orders placed by the bears and provide a second signal with a potential move to 1.0769, where I will fix profits. If this level is tested, the bull market will likely start up again. The pressure on the pair will return if there are no buyers around 1.0666 and the EUR/USD has the potential to decrease. A breach of this level would result in a fall to the area of the next support at 1.0638. The only indication to buy the euro will be the development of a false collapse there. I'll start long positions right away in anticipation of a recovery from the 1.0614 low or even lower, around 1.0584, with the target of a 30- to 35-point upward reversal during the day.

If you want to trade short positions on EUR/USD, you'll need:

Asian economic growth was completely halted by sellers, who tried their best to turn away buyers. The current crucial task is to protect the nearest resistance of 1.0699. The development of a false breakout at this level, which will result in a decrease in the euro and an update of the nearest support of 1.0666, which has already been tested twice in the previous few hours, will be the best scenario for starting new short positions. The breakout and reverse test of this range serve as another indication to start short positions with an exit at 1.0638, which will further limit the bullish momentum because the moving averages that support the bulls are somewhat lower. A more significant decrease to the area of 1.0614, where I will take profit, will result from fixing below this range. I encourage you to delay opening short positions until the level of 1.0731, from which we have already sold the euro today if the EUR/USD moves higher throughout the American session and there are no bears at 1.0699. Moreover, you can only sell there following a failed consolidation. In anticipation of a rebound from the high of 1.0769, I will open short positions right away with a 30- to 35-point corrective in mind.

Long and short positions were down in the COT report (Commitment of Traders) for February 7. This undoubtedly took place after the Federal Reserve System and the European Central Bank decided on interest rates. However, it should be noted that these data are of no importance right now because statistics are only just starting to catch up following the cyberattack on the CFTC and the information from a month ago is not very pertinent right now. They'll hold off until new reports are out before turning to more recent data. We are anticipating Fed Chairman Jerome Powell's significant speech in the near future, which could influence the direction of the dollar for the next month up until the Fed meeting at the end of March. Hawkish remarks on inflation and monetary policy will increase demand for the dollar and cause the euro to decline. The demand for the dollar will likely decline further if we don't hear anything new. According to the COT data, the number of long non-commercial positions fell by 8,417 to 238,338 while the number of short non-commercial positions fell by 22,946 to 73,300. The total non-commercial net position rose to 165,038 from 150,509 after the week. The weekly closing price fell from 1.0893 to 1.0742.

Signals from indicators

Moving Averages

The fact that trading is taking place just above the 30 and 50-day moving averages suggests that the market is optimistic.

Notably, the author considers the time and prices of moving averages on the hourly chart H1 and departs from the standard definition of the traditional daily moving averages on the daily chart D1.

Bands by Bollinger

The indicator's upper limit, which is located at 1.0740, will serve as resistance in the event of expansion.

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.