FX.co ★ EUR/USD trading plan for North American session on November 3, 2023. COT report and overview of yesterday's trades. US NFP report to support EUR

In my morning review, I mentioned the level of 1.0616 as a possible entry point. Let's have a look at what happened on the 5-minute chart. The price declined to this level but failed to test it and form a false breakout. That is why I couldn't open long positions. For the second half of the day, the technical setup has been left the same.

For long positions on EUR/USD

It is clear that the US nonfarm employment change for October will play a decisive role in defining the price direction. A sharp decline in the number of jobs following a significant rise in September will serve as additional evidence that the Federal Reserve may indeed announce the end of the interest rate hiking cycle in December. This will weaken the dollar and lead to further growth of the euro, which has already started after Wednesday's FOMC meeting. The unemployment rate and the ISM non-manufacturing business activity index also carry significant weight, so keep an eye on these indicators. In case of a decrease in the pair, a preferable level to accumulate long positions will be found around 1.0616. The formation of a false breakout there will provide a good entry point for long positions with anticipation of further recovery towards the resistance 1.0642. A breakout of this range and its retest from above will offer a chance for another surge to update the high 1.0667, where I will take profit. Only weak data from the US may push the euro up to 1.0693. If EUR/USD declines and no bullish activity is observed at 1.0616, which is also likely, the pressure on the euro will return, leading to a stronger downward movement to 1.0593. This is where the moving averages support the bulls. Only the formation of a false breakout at this level will create a signal to enter the market. I will be opening long positions immediately on a rebound from 1.0569, targeting an upward correction of 30-35 pips within the day.

For short positions on EUR/USD

Despite all the efforts, sellers failed to make an impact, which is not surprising after recent Fed statements. I expect the presence of major players around 1.0642. Only the formation of a false breakout there, coupled with the strong US labor market report, will give a sell signal, aiming for a decline to the nearest support at 1.0616. After breaking through and securing positions below this range, as well as retesting it from below, I plan to get another sell signal, targeting the 1.0593 level. The furthest target will be the low of 1.0569, where I will take profit. If EUR/USD moves up during the US session and bears are absent at 1.0616, buyers will surely attempt to reach the resistance at 1.0667. It is also possible to sell there but only after an unsuccessful consolidation and a false breakout. I will be opening short positions immediately on a rebound from the high of 1.0693, targeting a downward correction of 30-35 pips within the day.

COT report

The Commitments of Traders report for October 24 indicated an increase in long positions and a reduction in short positions. Considering that a halt in the European Central Bank's monetary tightening was widely anticipated, its decision had a modest impact on the market and helped the euro to rebound against the US dollar. The US Federal Reserve is expected to maintain the status quo at its policy meeting this week. Yet, the recent US data does not rule out the possibility that the Fed committee members may hint at a potential final rate hike in December of this year, which could fortify the dollar. The COT report showed that non-commercial long positions grew by 1,256 to 215,569, while non-commercial short positions decreased by 1,587 to 130,316. Consequently, the spread between long and short positions decreased by 1,350. The closing price rose to 1.0613 from 1.0596, confirming an upward correction in the euro.

Indicator signals:

Moving Averages

Trading above the 30- and 50-day moving averages indicates a further possible rise in the euro.

Please note that the time period and levels of the moving averages are analyzed only for the H1 chart, which differs from the general definition of the classic daily moving averages on the D1 chart.

Bollinger Bands

If the pair declines, the lower band of the indicator at 1.0610 will act as support.

Description of indicators:

• A moving average of a 50-day period determines the current trend by smoothing volatility and noise; marked in yellow on the chart;

• A moving average of a 30-day period determines the current trend by smoothing volatility and noise; marked in green on the chart;

• MACD Indicator (Moving Average Convergence/Divergence) Fast EMA with a 12-day period; Slow EMA with a 26-day period. SMA with a 9-day period;

• Bollinger Bands: 20-day period;

• Non-commercial traders are speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements;

• Long non-commercial positions represent the total number of long positions opened by non-commercial traders;

• Short non-commercial positions represent the total number of short positions opened by non-commercial traders;

• The non-commercial net position is the difference between short and long positions of non-commercial traders.