FX.co ★ EUR/USD: trading plan for the US session on May 31st (analysis of morning deals). The euro continued to grow

In my morning forecast, I paid attention to the 1.0834 level and planned to decide to enter the market from it. Let's look at the 5-minute chart and figure out what happened there. Growth occurred, but it has yet to reach the formation of a suitable entry point into the market there, which did not allow us to get a clear signal. In this regard, the technical picture was revised for the afternoon.

To open long positions on EURUSD, you need:

The news that inflation in the eurozone turned out to be slightly higher than economists' forecasts helped the euro strengthen its position against the dollar, as this will certainly postpone the plans of the European Central Bank to consistently lower rates for a later period. We also have a lot of interesting statistics ahead related to American inflation. Figures are expected for the main index of personal consumption expenditures, which the Fed places quite an important emphasis on. A sharp increase in the indicator will certainly put pressure on the pair, as well as data on the growth of income and spending levels of Americans. In the case of a decline in the pair, before buying, I would like to see the presence of bulls in the area of the new support of 1.0836, which is relatively intermediate and also below the moving averages. I will open long positions there only after the formation of a false breakdown, which will be a suitable option to enter the market with the expectation of further growth and a test of a new resistance of 1.0861. A breakout and a top-down update of this range will strengthen the pair with a chance of a return to the uptrend and a breakthrough to 1.0888. The farthest target will be a maximum of 1.0918, where I will record profits. If EUR/USD declines and there is no activity around 1.0836 in the afternoon, the pressure on the market will return, leading to a larger drop in the pair to the 1.0813–day low. I will also enter there only after the formation of a false breakdown. I plan to open long positions immediately for a rebound from 1.0789 with the aim of an upward correction of 30-35 points within the day.

To open short positions on EURUSD, you need:

Sellers have a chance to bring the market back under control, but this requires good statistics on the United States and another inflationary surge. It would also be nice for sellers to declare themselves in the resistance area 1.0861, where the pair is now heading. Only a false breakout there will give an entry point into new short positions with the prospect of a decline in the euro and an update of support at 1.0836. A breakout and consolidation below this range and a reverse bottom-up test will give another selling point, with the pair moving to the low of 1.0813, where I expect to see a more active manifestation of buyers. The farthest target will be a minimum of 1.0789, where I will record profits. In the event of an upward movement of EUR/USD in the afternoon, as well as the absence of bears in the area of 1.0861 after the news of a slowdown in the growth of the consumer spending index, buyers will strengthen their advantage. In this case, I will postpone sales until the next resistance test at 1.0888. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately for a rebound from 1.0918 with the aim of a downward correction of 30-35 points.

The COT report (Commitment of Traders) for May 21 showed an increase in long positions and a reduction in short ones. The more active reduction of short positions is due to statements by representatives of the European Central Bank and their desire to reduce interest rates as quickly as possible, giving the eurozone economy a chance to recover in the second half of the year. This is well received by buyers of risky assets despite the rather small chances of seeing several more rate cuts before the end of the year. The COT report indicates that long non-profit positions increased by 4,176 to 182,574, while short non-profit positions fell by 20,144 to 141,099. As a result, the spread between long and short positions fell by 35.

Indicator signals:

Moving averages

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

Note: The author considers the period and prices of moving averages on the H1 hourly chart, which differs from the classical daily moving averages on the D1 daily chart.

Bollinger Bands:

In the case of a decline, the lower boundary of the indicator, around 1.0813, will act as support.

Indicator Descriptions:

• 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 (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 are speculators such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet 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.
• Total non-commercial net position is the difference between short and long positions of non-commercial traders.