FX.co ★ EUR/USD: trading plan for European session on March 10. Commitment of Traders. NFP data to affect EUR trajectory

Yesterday, there was one entry point. Now, let's look at the 5-minute chart and figure out what actually happened. In my morning article, I turned your attention to 1.0560 and recommended making decisions with this level in focus. A rise and a false breakout of this level led to a sell signal. As seen on the chart, a large downward movement did not occur. There were no entry points in the afternoon.

When to open long positions on EUR/USD:

Bulls are unlikely to get a chance to carry out an upward correction in the morning. The economic calendar for the eurozone will be empty. In the afternoon, the US will unveil the Nonfarm Payrolls report. This data will have a big impact on the Fed's key rate decision. A surge in volatility might occur after the release of Germany's Consumer Price Index for February. However, market reaction is likely to be muted. Traders could also ignore the speeches of ECB President Christine Lagarde and ECB Executive Board Member Fabio Panetta. If Germany releases negative macro stats, bulls will have to protect the support level of 1.0574 formed yesterday. A false breakout of this level may give a buy signal. The pair could recover to the resistance level of 1.0598. A breakout and a downward test of this level amid rising inflation in Germany will create entry points into long positions with a jump to 1.0622. It will be hard for the bulls to push the pair above this level. A breakout of 1.0622 will occur only after the release of NFP data. It will force the bears to close Stop Loss orders, giving a buy signal with the likelihood of moving to 1.0646. At this level, I recommend locking in profits. A test of this level will signal the end of the bear market. If EUR/USD declines and buyers show no energy at 1.0574, which is more likely, the pressure on the pair will return. A breakout of this level will lead to a fall to the support level of 1.0551. Only a false breakout will provide a buy signal. You could sell EUR/USD at a bounce from 1.0527 or 1.0487, keeping in mind an upward intraday correction of 30-35 pips.

When to open short positions on EUR/USD:

Sellers tried to regain control but failed. A further trajectory of the pair will depend on the Nonfarm Payrolls report, which we will discuss in more detail in my article on the American session. Now, the bears need to protect the resistance level of 1.0598. It is better to open short positions after a rise and a false breakout of this level. It could trigger a decline and a breakout of the support level of 1.0574. Below this level, the moving averages are passing in positive territory. A breakout and an upward retest of this level amid weak data for the eurozone will give a sell signal with a decrease to 1.0551. It will facilitate the bearish sentiment. A decline below this level after the NFP report will cause a more significant downward movement to 1.0527 where I recommend locking in profits. If EUR/USD rises during the European session and bears show no energy at 1.0598, I would advise you to postpone short positions until a false breakout of 1.0622. You could also sell EUR/USD at a bounce from 1.0646, keeping in mind a downward intraday correction of 30-35 pips.

COT report

According to the COT report from February 7, the number of both long and short positions dropped. The COT report from February 7 logged a decrease in both long and short positions. This happened just after the Federal Reserve and the ECB announced their key rate decisions. In fact, the COT data from a month ago is of little interest at this point as it is not relevant due to the technical glitch the CFTC recently suffered. That is why we have to wait for fresh reports. In the near future, Fed Chair Jerome Powell will give testimony, which may determine the dollar's future trend for a month ahead. The FOMC meeting will take place at the end of March. Hawkish remarks about inflation and monetary policy will boost the US dollar against the euro. If Powell says nothing new on the matter, the greenback is likely to show weakness. According to the COT report, the number of long non-commercial positions decreased by 8,417 to 238,338. The number of short non-commercial positions slid by 22,946 to 73,300. Consequently, the non-commercial net position came in at 165,038 versus 150,509. The weekly closing price fell to 1.0742 from 1.0893.

Indicators' signals:

Trading is carried out above the 30 and 50 daily moving averages, which indicates an upward correction.

Moving averages

Note: The period and prices of moving averages are considered by the author on the H1 (1-hour) chart and differ from the general definition of the classic daily moving averages on the daily D1 chart.

Bollinger Bands

If EUR/USD declines, the indicator's lower border at 1.0550 will serve as support.

Description of indicators

• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked yellow on the chart.
• Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked green on the chart.
• MACD indicator (Moving Average Convergence/Divergence - convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and 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.