EUR/USD: trading plan for US session on April 18. Overview of morning trades. Bulls regain initiative

In the previous review, I drew your attention to the level of 1.0983 and recommended entering the market from it. Let's take a look at the 5-minute chart and analyze the situation. The EUR/USD pair grew and formed a false breakout at 1.0983. This led to a sell signal but there was no significant downward movement. A lack of interest in selling the euro and a rapid return to yesterday's decline forced an exit from short positions. The technical picture was partially revised for the second half of the day.

Long positions on EUR/USD:

The focus will now shift to US data, as only they can bring sellers back to the market, anticipating at least some intraday downward correction. Attention should be paid to the volume of building permits and the number of new housing starts in the US. The real estate market is extremely important, and a slowdown in its growth could negatively affect the direction of the US dollar, leading to another surge in the euro in the second half of the day. FOMC member Michelle Bowman's speech is unlikely to surprise the market, but in the absence of other interesting data, it is worth listening to what the policymaker has to say. Buying the euro at current highs is not the most promising trade, so I will expect a downward movement at the beginning of the US session and a false breakout near 1.0955. This will provide a buy signal with growth to the nearest resistance at 1.0995. A breakthrough and a test of this range after weak statistics in the US real estate market will strengthen buyers' confidence, returning the upward trend and creating an additional entry point for building long positions, reaching the resistance at 1.1034. The next target remains in the area of 1.1071, where traders may lock in profits. If the pair decreases and we see a lack of bullish activity at 1.0955 in the second half of the day, which is also quite likely, pressure on the euro will increase, and we will see a new decline to 1.0924. Only a false breakout at this level may provide a buy signal for the euro. One may open long positions on a rebound from the low of 1.0897, allowing an upward intraday correction of 30-35 pips.

Short positions on EUR/USD:

Bears showed a weak performance in the first half of the day, and they do not seem to be highly active now. If the situation does not change even after the US data, the euro's growth is likely to continue until the resistance at 1.0995 is tested. Notably, bears need to prevent the price from reaching above this level. Only a false breakout at this resistance, similar to what I analyzed above, may lead to a sell signal and a decline of the pair to the support at 1.0955. If this level is broken through and tested, the pressure on the pair may increase, leading to a more significant drop to the area of 1.0924. Settling below this level, the pair may drop to 1.0897, where traders may book their profits. If the EUR/USD pair increases during the US session and we see weak bearish activity at 1.0995, which cannot be ruled out, it will be better to postpone opening short positions until the price hits the level of 1.1034. One may sell the euro once the pair fails to fix below this level. In addition, you may open short positions on a rebound from the high of 1.1071, allowing a downward correction of 30-35 pips.

The COT report for April 11 recorded an increase in long positions and a reduction in short positions. Recent US statistics indicate a gradual overheating of the labor market and a reduction in retail sales volume, which will undoubtedly positively affect inflationary pressure in the US, allowing the Federal Reserve to stop the interest rate hike cycle. However, according to the minutes of the last meeting, policymakers do not intend to do so yet, and most likely, we will see another rate hike of 0.25% in May this year. This will allow the US dollar to maintain its leading position against the euro, trading below 1.1000. There is nothing interesting this week, except for activity in the private and manufacturing sectors, so euro sellers will have every chance to continue the downward correction. The COT report shows that non-commercial long positions increased by 18,764 to 244,180, while non-commercial short positions decreased by 1,181 to 80,842. As a result, the total non-commercial net position decreased and amounted to 162,496 compared to 143,393. The weekly closing price decreased and amounted to 1.0950 against 1.1000.

Signals of indicators:

Moving Averages

The pair is trading near the 30- and 50-day moving averages, indicating the market's sideways movement.

Note: The period and prices of the moving averages are considered by the author on an hourly chart H1 and differ from the general definition of classic daily moving averages on a daily chart D1.

Bollinger Bands

If the pair declines, the lower boundary of the indicator near 1.0897 will offer support.

Descriptions of indicators

Moving average determines the current trend by smoothing market volatility and noise. Period 50. Marked in yellow on the chart.Moving average determines the current trend by smoothing market volatility and noise. Period 30. Marked in green on the chart.MACD indicator (Moving Average Convergence/Divergence). Fast EMA 12. Slow EMA 26. SMA 9Bollinger Bands. Period 20Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet 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 position of non-commercial traders.Total non-commercial net position is the difference between short and long positions of non-commercial traders.