FX.co ★ EUR/USD: trading plan for the US session on April 16th (analysis of morning deals). Fewer people are willing to sell euro

In my morning forecast, I pointed out the level of 1.0628 and planned to make trading decisions based on it. Let's take a look at the 5-minute chart and analyze what happened there. The rise and formation of a false breakout around 1.0628 led to a sell signal, which was not fully realized. After a 10-point downward movement, the pair returned to 1.0628, where trading is currently taking place. For this reason, I exited short positions and reassessed the technical picture.

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

Impressive figures from the ZEW business sentiment index for the Eurozone countries limited the downside potential of the pair, which even allowed the euro to recover slightly within the expected correction. But ahead of us are no less important, if not more important, figures on the volume of building permits issued in the US, the number of new foundations laid, and changes in industrial production. But personally, even if the data turns out to be better than economists' forecasts, although the euro may react with a decline, significant buyers will immediately manifest themselves in the market, which I plan to take advantage of. I prefer to act only on the decline after the formation of a false breakout around the new support area at 1.0605, formed by the end of the first half of the day. This will be a suitable option for buying in anticipation of a small correction to around 1.0647, where the moving averages are slightly below, favoring sellers. Breaking and updating this range from top to bottom will strengthen the pair, with a chance for a surge to 1.0686. The ultimate target will be the maximum at 1.0728, where I will take a profit. In the scenario of a further decline in EUR/USD and a lack of activity around 1.0605 in the second half of the day, the pressure on the euro within the bearish market framework will only intensify. In such a case, I will enter the market only after the formation of a false breakout around the next support at 1.0569. I plan to open long positions immediately on the rebound from 1.0545, with a target of a 30-35 point upward correction within the day.

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

Euro sellers have all the chances for further decline. Strong US data, together with the formation of a false breakout around the new resistance at 1.0647, formed by the end of the first half of the day, will be an ideal scenario for entering short positions with the prospect of retesting support at 1.0605. Breaking and consolidating below this range, as well as a reverse bottom-up test, will provide another selling point, with the pair moving towards 1.0569, reinforcing the bearish trend. There, I expect more active participation from major buyers. The ultimate target will be the minimum at 1.0545, where I will take a profit. In the scenario of upward movement in EUR/USD in the second half of the day, as well as the absence of bears at 1.0647, which is more likely, bulls will try to play back some of the declines that occurred yesterday. In such a case, I will postpone sales until testing the next resistance at 1.0686. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately on the rebound from 1.0728, with a target of a 30-35 point downward correction.

In the COT report (Commitment of Traders) for April 9, there was a decrease in long and short positions. The meeting of the European Central Bank and the dovish tone of policymakers, as well as the significant drop in the euro that followed, indicate the problems that buyers of risky assets are experiencing and will continue to experience. Considering that the stance of the Federal Reserve System will remain tight for a longer period, there is no expectation of a return in demand for the euro. For this reason, I am betting on further development of the bullish trend for the US dollar and a decline in the euro. The COT report indicates that long non-commercial positions decreased by 12,839 to 175,419, while short non-commercial positions decreased by 28,768 to 142,696. As a result, the spread between long and short positions increased by 1,451.

Indicator Signals:

Moving Averages

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

Note: The period and prices of 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 case of a decline, the lower boundary of the indicator, around 1.0605, will act as support.

Description of Indicators:

• Moving Average (MA): Determines the current trend by smoothing volatility and noise. Period 50. Marked in yellow on the chart.

• Moving Average (MA): Determines the current trend by smoothing volatility and noise. Period 30. Marked in green on the chart.

• MACD (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 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 short and long positions of non-commercial traders.