FX.co ★ EUR/USD: the plan for the American session on October 8 (analysis of morning deals). Euro buyers are waiting for data on the US labor market

To open long positions on EURUSD, it is required:

In my morning forecast, I paid attention to the 1.1542 level and recommended making decisions from it. Let's look at the 5-minute chart and figure out what happened. An unsuccessful attempt to break and consolidate below the level of 1.1542 led to the formation of a signal to open long positions, which caused the pair to instantly recover to the area of 1.1570 even before the publication of data on the US labor market. Now everything will depend only on them. From a technical point of view, nothing has changed.

Data on the US labor market may lead to a surge in market volatility. However, the whole emphasis is placed on whether the growth of new jobs above the August value will be recorded or not. If not, the euro's growth may continue. In this case, the task of buyers will be a breakthrough and consolidation above the 1.1570 range. However, only its reverse test from top to bottom forms a signal to buy the euro in the expectation of further recovery of the pair to a maximum of 1.1595. A more distant target will be the 1.1618 area, where I recommend fixing the profits. In the scenario of a decline in EUR/USD after publishing the labor market report, it is best not to rush with long positions. The optimal scenario will be the next formation of a false breakdown in the support area of 1.1542. If there is no bull activity at this level, I advise you to postpone long positions to the next weekly low - 1.1510. It is possible to open long positions immediately for a rebound only in the area of 1.1482 and 1.1454 supports and then counting on an upward correction of 15-20 points within a day.

To open short positions on EURUSD, you need:

Euro sellers are also counting on labor market data. However, the report should exceed economists' forecasts. All of them are aimed at the next monthly lows, to which the way can be opened already in the afternoon. A very important task remains to protect the resistance of 1.1570, near which trading is now underway. Only the next formation of a false breakdown there in the afternoon will return pressure on the pair, which will push it to the intermediate support of 1.1542, below which the bears failed to break through today. A breakthrough of this level with its reverse test from the bottom up will form a new entry point into short positions to reduce EUR/USD already to the areas of 1.1510 and 1.1482, where I recommend fixing the profits. A longer-range target will be a minimum of 1.1454. In the scenario of the absence of sellers at the level of 1.1570, it is best to postpone sales until the test of a larger resistance of 1.1595 or open short positions immediately for a rebound based on a downward correction of 15-20 points from the new high of 1.1618.

The COT report (Commitment of Traders) for September 28 recorded a sharp increase in short and long positions. However, the former turned out to be more, which led to a reduction in the net position. The fact that the United States of America is currently going through difficult political times has kept the demand for the US dollar all last week and put pressure on risky assets. The prospect of changes in the monetary policy of the Federal Reserve System allowed traders to build up long positions on the dollar without much difficulty, as many investors expect the Central Bank to begin reducing the bond purchase program closer to the end of this year. An important report on the number of people employed in the US non-agricultural sector will be released this week. It will shed light on the further actions of the Central Bank since a lot now depends on labor market indicators. Demand for risky assets will remain limited due to the high probability of another wave of the spread of coronavirus and its new Delta strain. Last week, the President of the European Central Bank said a lot that she would continue to adhere to a wait-and-see position and maintain a stimulating policy at current levels. However, the observed surge in inflationary pressure in the 4th quarter of this year may spoil the regulator's plans. The COT report indicates that long non-commercial positions increased from 189,406 to the level of 195,043, while short non-commercial positions jumped quite seriously - from the level of 177,311 to the level of 194,171. At the end of the week, the total non-commercial net position dropped from the level of 12,095 to the level of 872. The weekly closing price also fell to 1.1695 from 1.1726.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily moving averages, which indicates the lateral nature 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

A breakthrough of the upper limit of the indicator in the area of 1.1570 will lead to a new wave of euro growth. A break of the lower limit of the indicator in the area of 1.1542 will increase the pressure on the pair.

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.