Main Quotes Calendar Forum
flag

FX.co ★ EUR/USD: trading plan for European session on April 10. COT report. EUR continues trading sideways

parent
Forex Analysis:::2023-04-10T09:08:18

EUR/USD: trading plan for European session on April 10. COT report. EUR continues trading sideways

Last Friday, only one entry signal was formed. I suggest looking at the 5-minute chart and figuring out what happened. In my morning forecast, I asked you to pay attention to the level of 1.0934 to decide when to enter the market. The formation of a false breakout at this level did not occur due to low market volatility. In the second half of the day, a sharp drop in the euro amid the US labor market data and a false breakout at 1.0888 allowed traders to open long positions. As a result, the pair increased by 20 pips.

EUR/USD: trading plan for European session on April 10. COT report. EUR continues trading sideways

Conditions to open long positions on EUR/USD:

Today, in the first half of the day, Friday's lull is expected to continue as there is no new statistical data again. I bet on further sideways trading and an attempt to return to its middle area around 1.0907. However, the optimal scenario for opening long positions will be a decrease and a false breakout of the lower border of the sideways channel located at 1.0879. This will give a buy signal and the target of returning to the resistance of 1.0907, formed last Friday. A breakthrough and a downward test of this range will allow buyers to regain control over the market, creating an additional long signal with the target at the high of 1.0933. The ultimate goal remains the area of 1.0964, where I will fix the profit. In case of a decline in EUR/USD and the absence of buyers at 1.0879, which is unlikely, pressure on the euro will increase, and we will see a downward movement to 1.0843. Only the formation of a false breakout there will give a signal to buy the euro. I will open long positions immediately on the rebound from the minimum of 1.0792 with the target of an upward correction of 30-35 pips within the day.

Conditions to open short positions on EUR/USD:

On Friday, sellers did everything to settle below 1.0907 and resume the downward correction, but even the US labor market data did not help them much. Now the most important task for the first half of the day is to protect the new resistance of 1.0907. There I expect to see major players betting on a further decline in the pair. The optimal scenario for opening new short positions from this level will be a false breakout, which could lead to a decline in the pair to the nearest support of 1.0879. Only a breakout and a reverse test of this range will increase pressure, pushing EUR/USD to 1.0843. A settlement below this level is unlikely to happen, but if it does, it will open the way to 1.0792, returning the market to a bearish trend. I will fix the profit there. In case of an upward movement of EUR/USD during the European session and the absence of bears at 1.0907, and such a scenario is also quite real, traders are better to avoid short positions until the price hits the level of 1.0934. There you can sell only after unsuccessful consolidation. I will open short positions immediately on the rebound from the high of 1.0964 with the target of a downward correction of 30-35 points.

EUR/USD: trading plan for European session on April 10. COT report. EUR continues trading sideways

COT report

According to the COT report from March 28, the number of both long and short positions increased. Since last week was not rich in events and the data on US consumer spending was not as good as expected, the Federal Reserve is likely to raise the interest rate at the next meeting. However, the aggressiveness of the European Central Bank will allow buyers of the euro to act more actively after each major decline in the euro against the US dollar. Apart from the US unemployment data, there is nothing interesting this week, so the euro has every chance to reach a new monthly high. The COT report unveiled that long non-commercial positions increased by 7,093 to 222,918, while short non-commercial positions jumped by 6,910 to 77,893. At the end of the week, the total non-commercial net position increased to 145,025 against 144,842. The weekly closing price rose to 1.0896 from 1.0821.

EUR/USD: trading plan for European session on April 10. COT report. EUR continues trading sideways

Signals of indicators:

Moving Averages

Trading is performed along the 30- and 50-day moving averages, which points to a flat movement.

Note: The author considers the period and prices of moving averages on the one-hour chart which differs from the general definition of the classic daily moving averages on the daily chart.

Bollinger Bands

In case of a decline, the lower limit of the indicator located at 1.0890 will act as support.

Description of indicators

  • Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 50. It is marked in yellow on the chart.
  • Moving average (a moving average determines the current trend by smoothing volatility and noise). The period is 30. It is marked in green on the graph.
  • MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). A fast EMA period is 12. A slow EMA period is 26. The SMA period is 9.
  • Bollinger Bands. The period is 20.
  • Non-profit speculative traders are individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions are the total number of long positions opened by non-commercial traders.
  • Short non-commercial positions are the total number of short positions opened by non-commercial traders.
  • The total non-commercial net position is a difference in the number of short and long positions opened by non-commercial traders.
Analyst InstaForex
Share this article:
parent
loader...
all-was_read__icon
You have watched all the best publications
presently.
We are already looking for something interesting for you...
all-was_read__star
Recently published:
loader...
More recent publications...