FX.co ★ EUR/USD: trading plan for the US session on July 10th (analysis of morning deals)

In my morning forecast, I highlighted the 1.0813 level and planned to make market entry decisions based on it. Let's look at the 5-minute chart and see what happened. A decline and the formation of a false breakout at 1.0813 led to a long position entry, resulting in a 12-point rise at the time of writing. The technical picture for the second half of the day remains unchanged.

For Opening Long Positions on EUR/USD:

Given the lack of Eurozone statistics, it is not surprising that buyers easily defended the 1.0813 level, as it is quite important from a technical standpoint. Although Fed Chairman Jerome Powell will speak again in the second half of the day, everything will likely stay the same. Powell will repeat what he said yesterday in the Senate, so the market is unlikely to react to his statements. There are no other statistics from the US, so the focus will shift to tomorrow's inflation data, keeping trading within the channel and leading to low volatility, similar to what we saw during the European session. Similar to the scenario discussed above, a decline and a false breakout at 1.0813 will provide a good entry point for long positions, targeting a recovery towards 1.0844, the new weekly high. A breakout and update above this range will strengthen the pair with a chance to rise towards the resistance at 1.0871. The furthest target will be the 1.0899 maximum, where I will be taking profits. Testing this level will allow the bullish trend to continue. If EUR/USD declines and shows no activity around 1.0813 in the second half of the day, and where the moving averages support the bulls, I will only enter long positions after forming a false breakout at the next support at 1.0785. I plan to open long positions immediately on a rebound from the 1.0757 minimum, aiming for an upward correction of 30-35 points within the day.

For Opening Short Positions on EUR/USD:

Sellers tried, but they can do more with support from major market players. Only a false breakout near the new resistance at 1.0844 will provide a good entry point for short positions, targeting a decline toward the support at 1.0813, where the moving averages support the bulls. A breakout and consolidation below this range and a retest from the bottom up will return pressure on the euro and provide another entry point for selling, targeting the 1.0785 minimum, where I expect to see more active euro buyers. The furthest target will be the 1.0757 area, where I will be taking profits. If EUR/USD rises in the second half of the day and bears are absent at 1.0844, which is unlikely, buyers will achieve further growth of the pair. In this case, I will delay selling until testing the next resistance at 1.0871. I will also sell there, but only after a failed consolidation. I plan to open short positions immediately on a rebound from 1.0899, aiming for a downward correction of 30-35 points.

In the COT report (Commitment of Traders) for July 2, there was a reduction in both short and long positions. The market needed a break, which participants took advantage of. Last week's absence of important statistics supported the demand for risk assets, although the reports must reflect this. Soon, we will have an important speech by Powell, which will help determine the summer direction of the dollar and US inflation data for June, which can turn the market. Therefore, it is too early to write off the US dollar. The COT report indicated that long non-commercial positions decreased by 3,001 to 164,369, while short non-commercial positions fell by 1,913 to 173,888. As a result, the spread between long and short positions increased by 1,902.

Indicator Signals:

Moving Averages:

Trading is conducted around the 30 and 50-day moving averages, indicating a sideways market.

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

Bollinger Bands:

In case of a decline, the indicator's lower boundary, around 1.0805, 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 Indicator: Moving Average Convergence/Divergence. 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 position of non-commercial traders.
• Total non-commercial net position: The difference between non-commercial traders' short and long positions.