In my morning forecast, I emphasized the level of 1.0925 and recommended making entry decisions based on it. Let's look at the 5-minute chart and analyze what happened there. The rise and formation of a false breakout around 1.0925 led to a sell signal, resulting in a downward movement of about 20 points, after which the pressure on the pair weakened. For this reason, the technical picture was not revised for the second half of the day.
To open long positions on EUR/USD, the following is required:
The released data on PMI activity indices in the Eurozone was more or less satisfactory, allowing euro buyers to maintain their positions and hope for a breakout beyond the 1.0925 resistance, which did not happen in the first half of the day. However, one important nuance related to the celebration of Thanksgiving Day in the US will undoubtedly affect volatility and market volume. For this reason, there is no news today, limiting the upside potential for the pair. The optimal option for buying remains the formation of a false breakout at the 1.0890 level. This will provide a good entry point for long positions, counting on further pair growth and another test of the 1.0925 resistance formed at the end of yesterday. A breakthrough and updating this range from top to bottom will give another buy signal and a chance to update the monthly maximum around 1.0962. The ultimate target will be the area of 1.1004, where I will take profit. In the case of a decline in EUR/USD and lack of activity at 1.0890 in the second half of the day, problems for euro buyers will increase. In this case, entering the market will always be possible after forming a false breakout around the next support at 1.0860. I will open long positions immediately on the rebound from 1.0827 with a target of an upward correction within the day by 30-35 points.
To open short positions on EUR/USD, the following is required:
Sellers showed themselves, but they needed help to reach 1.0890. During the US session, there may be another upward surge towards the 1.0925 resistance in the absence of news. Sellers will have to defend this level with all their might because missing it will quickly return the pair to the area of the monthly maximum. The formation of a false breakout at 1.0925, similar to what I discussed above, will give a sell signal, counting on a downward correction and a test of the 1.0890 support, where buyers may act more actively. After breaking and consolidating below this range and a reverse test from bottom to top, I expect to receive another sell signal with an exit to 1.0860. The ultimate target will be a minimum of 1.0827, where I will take profit. In case of an upward movement of EUR/USD during the US session and the absence of bears at 1.0925, trading will remain within the range. However, this will open the way for buyers to the monthly maximum of 1.0962. It is possible to sell there, but only after an unsuccessful consolidation. I will open short positions immediately on the rebound from 1.1004 with a target of a downward correction by 30-35 points.
In the COT report (Commitment of Traders) for November 14, there was an increase in long positions and a significant reduction in shorts. It is worth noting that the released inflation data indicated that the cycle of interest rate hikes in the US is over, which strongly impacted the US dollar and reduced short positions on the euro, returning demand to it. Soon, the minutes of the November meeting of the US Federal Reserve will be published, and traders will try to find answers to the remaining questions. However, it is already clear that interest rates have peaked, and a rate cut is expected next year. The COT report indicates that long non-commercial positions increased by 8,707 to 221,190, while short non-commercial positions decreased by 11,144 to 112,283. As a result, the spread between long and short positions increased by 3,283. The closing price sharply increased and amounted to 1.0902 against 1.0713.
Indicator signals:
Moving Averages
Trading is carried out around the 30 and 50-day moving averages, indicating a sideways market.
Note: The author considers the period and prices of moving averages on the hourly chart H1 and differs from the general definition of classic daily moving averages on the daily chart D1.
Bollinger Bands
In case of a decline, the lower boundary of the indicator, around 1.0860, will act as support.
Description of Indicators
Moving Average (50-day, yellow on the chart, determines the current trend by smoothing volatility and noise).Moving Average (30-day, green on the chart, determines the current trend by smoothing volatility and noise).MACD indicator (12, 26, 9).Bollinger Bands (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 differs between non-commercial long and short positions.