FX.co ★ EUR/USD: plan for the American session on November 3 (analysis of morning deals). The euro continued to fall, which began yesterday

In the first half of the day, no signals were formed to enter the market. Let's look at the 5-minute chart and figure out what happened there. In my morning forecast, I paid attention to 0.9800 and advised selling from this level. Unfortunately, after the breakdown of this range, the reverse correction did not reach its update from the bottom up, so it was impossible to enter the market further along the bearish trend. A similar story happened in the area of 0.9755, where the euro continued to fall after a short pause. The technical picture changed in the afternoon, although the market direction remains downward.

To open long positions on EURUSD, you need the following:

Everything that the euro sellers could do in the first half of the day, they did everything. It is unlikely that the direction will change in the near future, so I advise you to treat long positions quite carefully. The only thing that will help to correct the situation, in this case, are fundamental reports. Weak data on the number of initial applications for unemployment benefits, the foreign trade balance, and, in particular, the ISM index of business activity in the services sector – all this will lead to a sharp upward jerk of the pair, forcing the bears to close short positions. In case of a further fall in good reports, it will be possible to count only on a large support level of 0.9706. Only a false breakdown there will signal to open of long positions to develop an upward correction, which will help to return to the resistance of 0.9747 formed by the results of the first half of the day. A break and a top-down update of this range against weak US statistics will open the way to a maximum of 0.9788, giving additional hope for a larger upward movement to 0.9832, where the moving averages are playing on the side of the bears. The farthest target will be the 0.9887 area, where I recommend fixing the profits. With the option of a decline in EUR/USD during the American session, and most likely it will be, as well as the absence of buyers at 0.9706, the pressure on the pair will only increase. In this case, only a false breakdown in the area of the next support of 0.9679 will be a reason to buy the euro. I advise you to open long positions on EUR/USD immediately for a rebound only from the support of 0.9635, or even lower – around the minimum of 0.9592 with the aim of an upward correction of 30-35 points inside the day.

To open short positions on EURUSD, you need the following:

Sellers have done everything possible today and are ready to continue to pressure the euro – there would be a reason for this. Until trading is conducted below 0.9747, the bears will retain market control. A good option for opening short positions will be another false breakdown in this resistance, which will indicate the presence of large players in the market who expect EUR/USD to fall further after reports on the American economy. In this case, we can expect a decrease in the 0.9706 test. Fixing and updating from the bottom up 0.9706 form an additional sell signal with the demolition of buyers' stop orders and the euro's decline to 0.9679, where I recommend fixing the profits. We can expect to go beyond this level only after strong statistics on the United States. In the case of an upward movement of EUR/USD during the American session, as well as the absence of bears at 0.9747, it will be possible to see a slight rebound of the pair up to the area of 0.9788, where the sheaf bears will get down to business. If there is no one there, I advise you to postpone sales until 0.9832. The formation of a false breakout there will become an additional point for entering short positions. You can sell EUR/USD immediately for a rebound from the maximum of 0.9887, or even higher – from 0.9930 with the aim of a downward correction of 30-35 points.

The COT report (Commitment of Traders) for October 25 recorded a reduction in short positions and an increase in long ones. The US dollar is no longer in such demand as before, as there are more and more signs of the economy slipping into recession due to the super-aggressive monetary policy of the Federal Reserve System. Surely this week, we will hear that the committee has raised interest rates again and will continue in the same spirit until inflation begins to decline while sacrificing the economy. However, the bullish potential of the European currency is also limited. Recently, after an interest rate hike by the European Central Bank, it was announced that aggressive policy could be revised soon if the eurozone economy continues to shrink rapidly. The COT report indicates that long non-commercial positions increased by 24,031 to 226,734, while short non-commercial positions decreased by 2,728 to 151,825. At the end of the week, the total non-commercial net position remained positive and amounted to 74,909 against 48,150 a week earlier. This indicates that investors are taking advantage of the moment and continue to buy the cheap euro below parity, as well as accumulate long positions in hopes of ending the crisis and restoring the pair in the long term. The weekly closing price rose to 1.0000 against 0.9895.

Signals of indicators:

Moving Averages

Trading is below the 30 and 50-day moving averages, which indicates a further fall in the euro.

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

In the case of growth, the upper limit of the indicator around 0.9887 will act as 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 use the futures market for speculative purposes and to meet 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 position of non-commercial traders.
• Total non-commercial net position is the difference between the short and long positions of non-commercial traders.