FX.co ★ EUR/USD: trading plan for the US session on December 19th (analysis of morning deals). Euro buyers continue their attempts to push the pair higher

In my morning forecast, I emphasized the level of 1.0930 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 retest from top to bottom of 1.0930 provided an excellent buy signal, resulting in a pair's rise of more than 25 points. The technical picture was slightly revised for the second half of the day.

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

As I forecasted in the morning, inflation in the Eurozone remained unchanged, which provided slight support for the euro. During the US session, we await data on the volume of building permits issued and the number of new housing starts in the United States. An increase in these indicators could bring pressure on the pair, leading to the need to defend the new support at 1.0924, a movement towards which should undoubtedly take place. This level coincides with the moving averages, favoring buyers. A false breakout in the area of 1.0924 would provide an entry point for long positions, anticipating further recovery of EUR/USD and another upward push towards the resistance at 1.0967. Breaking and updating this range from top to bottom would signal a buy, with a chance of further upward trend development, aiming for an update at 1.1007. The ultimate target would be a new high this month at 1.1058, where I would take profits. In the scenario of a decline in EUR/USD and the absence of activity at 1.0924 during the US session, which is possible only in the case of very strong US data, one can expect a return of pressure on the pair. In this case, I plan to enter the market only after a false breakout of around 1.0891. I recommend opening long positions immediately on the rebound from 1.0857 with a target of a 30-35 point upward correction within the day.

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

Sellers did not show themselves during the European trading session, and the focus has now shifted to the American session. Considering that the intraday trend is upward, only a false breakout in the resistance area of 1.0967 will give a sell signal to return to the support at 1.0924 formed by the end of today. Only after breaking and fixing below this range, which may occur during the publication of strong US real estate market statistics and a bottom-up retest, do I expect to receive another sell signal with an exit to 1.0891. The ultimate target would be the minimum of 1.0857, where I would take profits. In the case of an upward movement in EUR/USD during the US session, as well as the absence of bears at 1.0967, which is more likely, it is best to postpone sales until testing the next resistance at 1.1007. Selling there is also an option, but only after an unsuccessful consolidation. I recommend opening short positions immediately on the rebound from 1.1058 with a 30-35-point downward correction target.

In the COT report (Commitment of Traders) for December 5, there was an increase in long positions and another significant reduction in short positions. The December meeting of the US Federal Reserve will be decisive for the dollar. After policymakers' statements, it will become clear in which direction the regulator is ready to move. A soft stance on rates next year will lead to a turnaround in the bearish market for the euro and an increase in the pair. In the case of strong inflation, a firm position will keep demand for the dollar for some time but is unlikely to significantly affect the long-term balance of forces in favor of buyers of risky assets. According to the COT report, long non-commercial positions increased by 2,230 to 235,684, while short non-commercial positions decreased by 6,965 to 83,324. As a result, the spread between long and short positions increased by 8,165.

Indicator signals:

Moving averages:

Trading is above the 30 and 50-day moving averages, indicating a probability of further euro growth.

Note: The author considers the period and prices of moving averages on the hourly chart H1, which differs 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 1.0915, will act as support.

Indicator Descriptions:

• Moving Average (MA) determines the current trend by smoothing volatility and noise. Period 50. Marked on the chart in yellow.
• Moving Average (MA) determines the current trend by smoothing volatility and noise. Period 30. Marked on the chart in green.
• MACD (Moving Average Convergence/Divergence) indicator: Fast EMA period 12, Slow EMA period 26, SMA period 9.
• Bollinger Bands: Period 20.
• Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting specific requirements.
• Long non-commercial positions represent the total long open position of non-commercial traders.
• Short non-commercial positions represent the total short open positions of non-commercial traders.
• The net non-commercial position is the difference between non-commercial traders' short and long positions.