FX.co ★ Forecast and trading signals for EUR/USD for October 10. COT report. Detailed analysis of the pair's movement and trade deals. The euro continues to fall after Nonfarm data.

EUR/USD 5M

Last Friday, the euro/dollar pair continued its downward movement and by the end of the day was below the Senkou Span B line. We said earlier that the Senkou Span B line is almost the last hope for the euro to protect itself from a new collapse, and now it turns out that it has been overcome, just like the Kijun-sen line on the 24-hour timeframe. Thus, right now one simple conclusion suggests itself: the euro will continue to form a long-term downward trend. There were reasons for the euro's fall on Friday. Reports from NonFarm Payrolls and unemployment in the US turned out to be quite strong, so the US currency continued to rise. It is strange that it rose by only 50 points, although in previous days, when there were no macroeconomic reasons for falling, it showed a firmer strengthening. But we have what we have. There will not be many important events in the new week, therefore, most likely, traders will turn their attention to geopolitics, which tend to only get worse over time.

In regards to Friday's trading signals, the situation was unambiguous, but not easy. The first signal to sell - consolidating below Senkou Span B - turned out to be false, but the price passed in the right direction for more than 15 points, so Stop Loss at breakeven should have been set. According to it, the deal was closed . The second sell signal was formed for several hours, but finally formed when US statistics were being released. Since the statistics turned out to be strong, traders had reason to open short positions. But even in the case of opening, it was not possible to earn a lot, since an upward rollback began almost immediately.

COT report:

The Commitment of Traders (COT) reports in 2022 can be entered into a textbook as an example. For half of the year, they showed a blatant bullish mood of commercial players, but at the same time, the euro fell steadily. Then for several months they showed a bearish mood, and the euro also fell steadily. Now the net position of non-commercial traders is bullish again, and the euro continues to fall. This happens, as we have already said, due to the fact that the demand for the US dollar remains very high amid a difficult geopolitical situation in the world. Therefore, even if the demand for the euro is rising, the high demand for the dollar does not allow the euro itself to grow. During the reporting week, the number of long positions for the non-commercial group decreased by 9,300, and the number of shorts by 19,200. Accordingly, the net position grew by about 9,900 contracts. This fact is not of particular importance, since the euro still remains "at the bottom". At this time, commercial traders still prefer the euro to the dollar. The number of longs is higher than the number of shorts for non-commercial traders by 45,000, but the euro cannot derive any dividends from this. Thus, the net position of the non-commercial group can continue to grow further, this does not change anything. Even if you pay attention to the total number of longs and shorts, their values are approximately the same, but the euro is still falling. Thus, it is necessary to wait for changes in the geopolitical and/or fundamental background in order for something to change in the currency market.

We recommend to familiarize yourself with:

Overview of the EUR/USD pair. October 10. The key report for the coming week is US inflation.

Overview of the GBP/USD pair. October 10. Liz Truss's ratings are falling, not having time to grow.

Forecast and trading signals for GBP/USD on October 10. Detailed analysis of the movement of the pair and trading transactions.

EUR/USD 1H

The upward trend has finally been canceled on the hourly timeframe. This, of course, does not mean that now the euro will fall without a chance, but the technique is now signaling a resumption of the downward trend. Moreover, on all timeframes. It is quite possible that this week we will see the euro around the level of 0.9553. We highlight the following levels for trading on Monday - 0.9553, 0.9844, 0.9945, 1.0019, 1.0072, as well as the Senkou Span B (0.9767) and Kijun-sen (0.9864) lines. Ichimoku indicator lines can move during the day, which should be taken into account when determining trading signals. There are also secondary support and resistance levels, but no signals are formed near them. Signals can be "rebounds" and "breakthrough" extreme levels and lines. Do not forget about placing a Stop Loss order at breakeven if the price has gone in the right direction for 15 points. This will protect you against possible losses if the signal turns out to be false. For today, there are no important events and reports planned in the EU and the US, so the day can be relatively calm. However, the euro may continue to fall.

Explanations for the chart:

Support and Resistance Levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Kijun-sen and Senkou Span B lines are lines of the Ichimoku indicator transferred to the hourly timeframe from the 4-hour one.

Support and resistance areas are areas from which the price has repeatedly rebounded off.

Yellow lines are trend lines, trend channels and any other technical patterns.

Indicator 1 on the COT charts is the size of the net position of each category of traders.

Indicator 2 on the COT charts is the size of the net position for the non-commercial group.