FX.co ★ EUR/USD: trading plan for the US session on September 29th (analysis of morning deals). The euro continued to rise amid slowing inflation

In my morning forecast, I emphasized the 1.0608 level and recommended making market entry decisions based on it. Let's take a look at the 5-minute chart and analyze what happened there. The upward movement and the formation of a false breakout led to a selling entry point for the euro, but at the time of writing this article, the downward movement had not occurred. For this reason, I decided to exit the market and reassess the technical picture for the second half of the day.

To open long positions on EUR/USD, the following is required:

The release of inflation data in the Eurozone, which slowed down more than economists expected in August, allowed the euro to continue its rise. Therefore, it's not surprising that there was no pressure on the pair around 1.0608, even though all the prerequisites for a decline were present. The focus is now shifted to the second half of the day, when extremely important data on the USA related to inflation will be released. Figures for the Core Personal Consumption Expenditures Price Index in the USA are expected, which is the Federal Reserve's preferred gauge for determining the level of inflation, as well as data on changes in US consumer spending and income levels. A decrease in all of these indicators will clearly be bearish for the dollar, leading to a continuation of the pair's upward correction. If the reaction to the data leads to a decline in EUR/USD, as it did yesterday, I will act around the new support level at 1.0591, formed at the end of the European session. A false breakout there will provide a good entry point for long positions, with the expectation of an upward correction in the pair towards the resistance level at 1.0641. A breakout and test of this range from top to bottom will strengthen demand for the euro, providing an opportunity for a move towards 1.0671. The ultimate target will be the area around 1.0704, where I will take a profit. In the case of a decline in EUR/USD and a bearish reaction to the released data, remember that the downtrend is still intact, and if there is no activity around 1.0591, it's best to postpone buying until a false breakout forms around 1.0559, where the moving averages are playing on the bulls' side. I will open long positions on a rebound from the minimum of 1.0531 with the target of an upward correction within the day of 30-35 points.

To open short positions on EUR/USD, the following is required:

Clearly, sellers are in no hurry to return to the market, probing it with each update of local highs. To stop the upward correction, good statistics from the USA and protection of the nearest resistance level at 1.0641 are required. A false breakout at this level, along with a surge in US inflation, will provide a good entry point for selling with a downward move to the new low at 1.0591. Only after breaking and settling below this range, as well as a bottom-to-top retest, do I expect to receive another selling signal with the goal of reaching 1.0559. The ultimate target will be the area around 1.0531, which will return control to the sellers. In the event of an upward movement in EUR/USD during the American session and a lack of bears at 1.0641, which I personally doubt, buyers will maintain a chance of further recovery in the pair. In such a scenario, I will postpone short positions until a new resistance at 1.0671 forms. Selling can be done there, but only after an unsuccessful breakout. I will open short positions on a rebound from the maximum of 1.0704 with the goal of a downward correction within the day of 30-35 points.

In the COT report (Commitment of Traders) for September 19, a sharp reduction in long positions and an increase in short positions were observed. Negative changes in the Eurozone's economy, as well as the risk of further interest rate hikes by the ECB, have all led to the further development of the bearish market. Not even the Federal Reserve's decision to leave interest rates unchanged helped the euro, although it should be noted that policymakers made it clear that they do not rule out another increase in US borrowing costs by the end of this year. The COT report indicates that non-commercial long positions decreased by 4,952 to 207,424, while non-commercial short positions increased by 6,147 to 105,443. As a result, the spread between long and short positions decreased by 8,290. The closing price dropped to 1.0719 from 1.0736, indicating a bearish market.

Indicator signals:

Moving averages

Trading is taking place above the 30 and 50-day moving averages, indicating further growth of the pair.

Note: The period and prices of the moving averages are considered by the author on the hourly chart (H1) and differ from the general definition of classical daily moving averages on the daily chart (D1).

Bollinger Bands

In the event of a decline, the lower boundary of the indicator around 1.0540 will act as support.

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) 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 the short and long positions of non-commercial traders.