FX.co ★ EUR/USD: trading plan for the US session on May 9th (analysis of morning deals). The euro rebounded from 1.0726

In my morning forecast, I paid attention to the 1.0726 level and planned to make decisions on entering the market from it. Let's look at the 5-minute chart and figure out what happened there. The decline and the formation of a false breakout in the area of 1.0726 gave an excellent entry point into long positions. However, the growth was only about 13 points, which indicates the continuation of low market volatility against the background of the absence of important fundamental statistics. In the afternoon, the technical picture was not revised.

To open long positions on EURUSD, you need:

Traders clearly understand that the lack of new benchmarks is unlikely to lead to strong and directional market movements, which is why they act so cautiously, without any enthusiasm. The second half of the day may pass exactly the same as the first, because weekly data on the number of initial applications for unemployment benefits and the number of repeated applications for unemployment benefits are unlikely to shake the market. For this reason, all hope is for the decision of the Bank of England, which may affect other risky assets. I plan to buy euros as low as possible, relying more on the morning levels. I will count on the first manifestation of buyers in the support area of 1.0726, which proved itself well during European trading. The formation of a false breakdown at this level will be a suitable option for entering the market in the expectation of an upward movement to the area of 1.0758, where the moving averages are located. A breakout and a top-down update of this range will lead to a strengthening of the pair with a chance of a breakthrough to 1.0785, which will allow the upward correction to continue. The farthest target will be a maximum of 1.0812, where I will record profits. With the option of a decrease in EUR/USD and a lack of activity around 1.0726 in the afternoon, and this level has already been tested for strength once today, problems for euro buyers will only add, which will lead to a larger drop in the pair. In this case, I will enter only after the formation of a false breakdown in the area of the next support 1.0702. I'm going to open long positions immediately for a rebound from 1.0677 with the aim of an upward correction of 30-35 points within the day.

To open short positions on EURUSD, you need:

The buyers proved themselves, but this is clearly not enough to influence the situation as a whole. Before selling the euro, I would like to see the presence of major players in the market and see the formation of a false breakdown in the resistance area of 1.0758. This would be a suitable scenario for opening short positions with the prospect of a further decline in the euro and a re-update of the 1.0726 support. Only very good data on the US labor market can help with this. A breakout and consolidation below this range, as well as a reverse bottom-up test, will give another selling point with the pair moving to the low of 1.0702 and 1.0677. The farthest target will be a minimum of 1.0642, where I will record profits. A test of this level will indicate a resumption of the bear market. In case of an upward movement of EUR/USD in the afternoon, as well as the absence of bears at 1.0758, buyers get a chance for an upward correction. In this case, I will postpone sales until the test of the next resistance of 1.0785. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately for a rebound from 1.0812 with the aim of a downward correction of 30-35 points.

The COT report (Commitment of Traders) for April 30 showed a reduction in long and short positions. The meeting of the Federal Reserve System could be interpreted in two ways, for this reason, there were no serious changes in the market. Some people have a chance that the Fed will start cutting rates this year, just as those who continue to buy the dollar, betting on a longer period of high interest rates, have exactly the same chances. The data released on the US labor market last week has not yet been taken into account in this COT report, so we do not fully see the whole picture. But despite this, I expect the pair to fall further within the framework of the observed medium-term trend. The COT report indicated that long non-profit positions fell by 111 to the level of 167,185, while short non-profit positions fell by 3,323 to the level of 173,962. As a result, the spread between long and short positions increased by 618.

Indicator signals:

Moving Averages

Trading is conducted 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 this differs from the general definition of classical daily moving averages on the daily chart (D1).

Bollinger Bands

In case of decline, the lower boundary of the indicator, around 1.0725, will act as support.

Description of Indicators:

• Moving average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
• Moving average (determines the current trend by smoothing 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 position 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.