FX.co ★ EUR/USD: plan for the US session on September 24 (analysis of morning deals). Euro buyers are preparing to defend the important support of 1.1723

To open long positions on EURUSD, you need:

The data for Germany turned out to be slightly better than economists' forecasts. However, as a result, two of the three indicators of the business environment declined, which did not allow euro buyers to get close to the important resistance of 1.1754. Let's look at the 5-minute chart and see what happened. Given that we never reached the designated levels, there were no entry points to the market. However, at the time of writing, the bears pushed the euro to the important support level of 1.1723, for which the main struggle will unfold in the second half of the day. From a technical point of view, nothing has changed. The levels also remained unchanged. During the US session, we are waiting for another speech by the Chairman of the Federal Reserve System, Jerome Powell, which may tip the scales in favor of buyers of the US dollar – this will put pressure on the EUR/USD pair. Therefore, it is now so important for euro buyers to cling to the support of 1.1723. The primary task of the bulls will be to protect this level, where the moving averages are playing on their side. The formation of a false breakdown will lead to the formation of a signal to open long positions based on an upward correction to the resistance of 1.1754. A break and consolidation above this range will lead to the formation of a new entry point into long positions, followed by the pair's recovery to the area of 1.1776. A more distant target will be the area of 1.1806, where I recommend fixing the profits. The growth of the euro will occur in the case of the dovish rhetoric of the Fed chairman and weak data on the US housing market. Under the scenario of the absence of bull activity in 1.1723, the situation may become seriously complicated. In this case, I advise you to open long positions in EUR/USD only after a false breakdown in the area of 1.1692. However, you can buy the euro immediately for a rebound only at a new local minimum of 1.1665, or even lower - around 1.1628, counting on an upward correction of 15-20 points within the day.

To open short positions on EURUSD, you need:

The bears are trying to take control of the market. However, they need to prove themselves in the support area of 1.1723. A break and consolidation below this range, which acts as a kind of middle of the temporary side channel, will increase pressure on the euro. The reverse test of 1.1723 from the bottom up forms an additional sell signal with a return to the week's minimum of 1.1692. A break in this range will also open a direct road to new 1.1665 and 1.1628, where I recommend fixing the profits. If EUR/USD rises in the afternoon after the Fed Chairman's speech, the bears will need a lot of effort to protect the resistance of 1.1754 again. Only the formation of a false breakout on it will form a good entry point into short positions. In the scenario of no sellers at the level of 1.1754, it is best to postpone sales until the test of a larger resistance of 1.1776. I advise you to open short positions immediately for a rebound based on a downward correction of 15-20 points only from the new maximum of 1.1806.

The COT report (Commitment of Traders) for September 14 recorded a reduction in long and short positions. All this is a consequence of the wait-and-see attitude of traders in the early autumn of this year when the Federal Reserve System can shed light on its further monetary policy. A lot will now depend on how the US authorities solve the problem of the national debt limit, which is already putting pressure on stock markets, returning demand for the US dollar, which harms risky assets. This week, the situation on this issue should somehow become clearer. The demand for risky assets is also limited due to the high probability of another wave of the spread of the coronavirus and its new Delta strain. All this will force the European Central Bank to continue to adhere to a wait-and-see position and maintain a stimulating policy at current levels, which limits the upward potential of the EUR/USD pair. The COT report indicates that long non-commercial positions decreased from 189,904 to the level of 186,554, while short non-commercial positions decreased from the level of 163,596 to the level of 158,749. At the end of the week, the total non-commercial net position rose slightly to 27,805 from 26,308. The weekly closing price fell from 1.1870 to 1.1809.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily moving averages, which indicates an attempt by the bears to regain control of the market.

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

Bollinger Bands

If the pair grows, the upper limit of the indicator in the area of 1.1754 will act as a resistance.

Description of indicators

• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.
• Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.
• MACD indicator (Moving Average Convergence / Divergence - moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-profit speculative traders, 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 the short and long positions of non-commercial traders.