FX.co ★ EUR/USD: trading plan for the US session on September 25th (analysis of morning deals). Euro failed again after German data

In my morning forecast, I emphasized the level of 1.0645 and recommended making entry decisions based on it. Let's look at the 5-minute chart and analyze what happened there. The breakout and subsequent test of 1.0645 provided a good selling signal, but after a 15-point downward movement, the pressure on the pair decreased. Bears couldn't even achieve a new monthly minimum, which once again confirms the presence of a large buyer in this range after active actions were observed there last Friday. The technical picture was slightly revised in the second half of the day.

To open long positions on EUR/USD:

The euro reacted predictably to the fall due to weak data from Germany. Although the indices turned out to be better than economists' forecasts, their further decline was perceived negatively. During the American session, there is no economic data, so volatility is expected to be restrained, and we are unlikely to reach a new monthly minimum. However, there is no talk of the bearish trend ending yet. I plan to act against the trend only after forming a false breakout around the nearest support at 1.0620. Only this will lead to a good entry point for long positions. With the expectation of an upward correction of the pair towards the target of 1.0652, a new resistance formed based on yesterday's results. Breaking and testing this range from top to bottom will bring demand for the euro, giving a chance for a push towards resistances at 1.0672 and 1.0704. The ultimate goal will be the area of 1.0734, where I will make profits. In the case of a decline in EUR/USD and the absence of activity at 1.0620, the bearish trend will continue to develop. In such a scenario, only the formation of a false breakout around 1.0590 will signal an entry into the market. I will open long positions only on a bounce from 1.0554 with the aim of an upward correction of 30–35 points within the day.

To open short positions on EUR/USD:

It is unsurprising that after weak Eurozone statistics, sellers continued to control the market. However, more is needed to develop a new bearish scenario further. Considering the lack of US statistics, protecting the new resistance at 1.0652, where moving averages favor sellers, will be the main task. A false breakout at this level will lead to a good entry point for selling with a downward movement towards 1.0620. Only after breaking and holding below this range, as well as a retest from the bottom up, do I expect to receive another selling signal to reach 1.0590, a new monthly minimum, where I anticipate the presence of larger buyers. The ultimate goal will be the area of 1.0554, where I will make profits. In the event of an upward movement in EUR/USD during the American session and the absence of bears at 1.0652, buyers will have a good chance to recover at the beginning of the week. In this case, I will postpone short positions until the new resistance at 1.0672. Selling is also possible there, but only after an unsuccessful breakout. I will open short positions immediately on a bounce from 1.0704 with the aim of a downward correction of 30–35 points.

In the COT (Commitment of Traders) report as of September 12, there was a sharp reduction in long positions and a slight decrease in short positions. Very serious negative changes in activity in the Eurozone and a downward revision of GDP for the second quarter have not prevented the European Central Bank from raising interest rates again. As you understand, this will not lead to anything good soon, which caused such a sharp decline in the European currency. In the near future, we will have a meeting of the Federal Reserve. If the committee decides to raise rates, the euro will fall even further against the dollar, so I advise against rushing into purchases in the current conditions. According to the COT report, long non-commercial positions decreased by 23,356 to 212,376, while short non-commercial positions decreased only by 205 to 99,296. As a result, the spread between long and short positions increased by 6,589. The closing price decreased to 1.0736 from 1.0728, indicating a bearish market.

Indicator Signals:

Moving Averages

Trading is taking place below the 30 and 50-day moving averages, indicating further decline in the pair.

Note: The author considers the period and prices of moving averages on the hourly chart (H1), and they differ from the standard definition of daily moving averages on the daily chart (D1).

Bollinger Bands

In the case of an uptrend, the upper boundary of the indicator will act as resistance around 1.0665.

Description of Indicators:

• Moving Average (determines the current trend by smoothing out volatility and noise). Period - 50. Marked in yellow on the chart;

• Moving Average (determines the current trend by smoothing out volatility and noise). Period - 30. Marked in green on the chart;

• MACD Indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages). 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.