FX.co ★ EUR/USD: trading plan for the US session on November 22nd (analysis of morning deals). Euro keeps chances of falling

In my morning forecast, I drew attention to the level of 1.0890 and recommended making decisions based on it for market entry. Let's look at the 5-minute chart and analyze what happened there. The decline and the formation of a false breakout around 1.0890 led to a buy signal, resulting in an upward movement of more than 20 points. Still, trading remained within the morning sideways channel. For this reason, the technical picture was not reconsidered for the second half of the day.

To open long positions on EUR/USD, it is required:

Considering that during the American session, only data on the weekly number of initial jobless claims, the University of Michigan Consumer Sentiment Index, and inflation expectations are released, it is unlikely that euro buyers will be able to fully utilize all the statistics and continue the upward correction of the pair. For this reason, I prefer to act within the sideways channel. The optimal option for buying remains the formation of a false breakout at the level of 1.0890, similar to what I analyzed above. This will provide another good entry point for long positions, counting on further pair growth and testing the resistance at 1.0925, formed as of yesterday. Breaking and updating this range from top to bottom, along with a good report on the eurozone, will give another buy signal and a chance to update the monthly maximum around 1.0962. The ultimate target will be the area of 1.1004, where I will take profit. In the case of a decline in EUR/USD and no activity at 1.0890 in the second half of the day, the problems for euro buyers will increase. You can always enter the market after forming a false breakout around the next support at 1.0860. I will open long positions immediately on the rebound from 1.0827 with the aim of an upward correction of 30-35 points within the day.

To open short positions on EUR/USD, it is required:

Sellers have shown themselves, but they still need to consolidate below 1.0890. After the US data is released, there may be an upward movement to the resistance area of 1.0925, just above which the moving averages are located, playing on the sellers' side. If sellers have remained, then it will be necessary to defend this level with all their might. The formation of a false breakout there will give a sell signal, counting on another downward correction and testing the support at 1.0890, where buyers may not be as active as in the first half of the day. After breaking and consolidating below this range and a bottom-up retest, I expect to get another sell signal with a target of 1.0860. The ultimate target will be a minimum of 1.0827, where I will take profit. With an upward movement of EUR/USD during the American session and the absence of bears at 1.0930, trading will remain within the sideways channel. However, this will open the way for buyers to the monthly maximum of 1.0962. It is possible to sell there, but only after an unsuccessful consolidation. I will open short positions immediately on the rebound from 1.1004 with the aim of a downward correction of 30-35 points.

In the COT report (Commitment of Traders), as of November 14, there was an increase in long positions and a significant reduction in shorts. It is worth noting that the released inflation data indicated that the cycle of rate hikes in the US is over, which had a strong impact on the US dollar and reduced short positions on the euro, returning demand to it. The minutes of the November meeting of the US Federal Reserve will be published soon, and traders will try to find answers to the remaining questions. However, it is already clear that rates have peaked; next year, we can expect a decrease. The COT report states that non-commercial long positions increased by 8,707 to 221,190, while non-commercial short positions decreased by 11,144 to 112,283. As a result, the spread between long and short positions increased by 3,283. The closing price sharply increased and amounted to 1.0902 against 1.0713.

Indicator signals:

Moving averages

Trading is carried out below the 30 and 50-day moving averages, indicating the possibility of a decline in the euro.

Note: The author considers the period and prices of moving averages on the hourly chart H1, which differs from the general definition of classical daily moving averages on the daily chart D1.

Bollinger Bands

In case of a decrease, the lower boundary of the indicator, around 1.0890, will act as support.

Description of indicators

• Moving average (determines the current trend by smoothing volatility and noise). Period 50. Marked on the chart in yellow.
• Moving average (determines the current trend by smoothing volatility and noise). Period 30. Marked on the chart in green.
• MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages). Fast EMA period 12. Slow EMA period 26. SMA period 9.
• Bollinger Bands. Period 20.
• Non-commercial traders - speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes and meeting 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 positions of non-commercial traders.
• The total non-commercial net position is the difference between non-commercial traders' short and long positions.