FX.co ★ EUR/USD: trading plan for the US session on April 26th (analysis of morning deals). The euro continues to rise

In my morning forecast, I drew attention to the level of 1.0754 and planned to make decisions on market entry based on it. Let's look at the 5-minute chart and analyze what happened there. Growth and the formation of a false breakout led to a signal to sell the euro, resulting in a pair's decline of 40 points. In the second half of the day, the technical picture was slightly revised.

To open long positions on EURUSD, the following is required:

Eurozone data allowed the euro to continue its rise within the upward correction observed this week. But ahead lies another set of significant statistics on the USA, which could swiftly pivot the market in the opposite direction, reminiscent of yesterday's movement, albeit temporarily. Figures on the personal consumption expenditures index, changes in expenditure and income levels of the US population, as well as data on the University of Michigan's consumer sentiment index and inflation expectations, are expected. Rising inflation and higher expectations may bring demand back to the US dollar, making it quite difficult for euro buyers to offer anything around 1.0717, where trading is taking place now. Only a false breakout there, along with weak US data, will provide an entry point for long positions, capable of pushing the euro towards the significant resistance of 1.0751 formed at the end of the first half of the day. Breaking through and updating this range from top to bottom will lead to the formation of a new bullish market and a buying signal with a chance to surge to 1.0779. The ultimate target will be a maximum of 1.0798, where I will take profit. In the scenario of a decline in EUR/USD and a lack of activity around 1.0717, as well as US inflation rising above economists' forecasts, pressure on the euro within the bearish trend will return. In this case, I will only enter the market after forming a false breakout around the next support level of 1.0682. I plan to open long positions immediately on the rebound from 1.0639, with a target of a 30-35 point upward correction within the day.

To open short positions on EURUSD, the following is required:

Euro sellers have every chance of the pair's decline, but for this, strong US statistics similar to yesterday are needed. In the case of growth, bears will have to show themselves again around 1.0751. The formation of a false breakout would be an excellent scenario for entering short positions with the aim of declining to around 1.0717, where the moving averages, favoring buyers, are located. Breaking through and consolidating below this range, along with a reverse bottom-up test, will provide another selling point, with the pair moving towards 1.0682, returning to the bearish trend. There, I expect more active involvement of large buyers. The ultimate target will be the minimum of 1.0639, where I will take profit. In the event of upward movement of EUR/USD in the second half of the day, as well as the absence of bears at 1.0751, bears will bid farewell in hopes of regaining control of the market by the end of the week. In this case, I will postpone sales until testing the next resistance at 1.0779. I will also sell there, but only after an unsuccessful consolidation. I plan to open short positions immediately on the rebound from 1.0798 with a target of a 30-35 point downward correction.

In the COT report (Commitment of Traders) for April 16, there was an increase in both long and short positions. Obviously, after the European Central Bank meeting and the soft tone of its policymakers, as well as after the latest US inflation data, which continued to rise, it isn't easy to imagine that buyers of the European currency will be active in the near future. Obviously, the higher the chances of maintaining a tough stance by the Federal Reserve, the stronger the US dollar will become against a range of other world currencies. For this reason, I bet on further development of the bullish trend for the US dollar and a decline in the euro. The COT report indicates that long non-commercial positions increased by 3,493 to the level of 178,912, while short non-commercial positions jumped by 23,992 to the level of 166,688. As a result, the spread between long and short positions increased by 226.

Indicator signals:

Moving Averages

Trading is conducted around the 30 and 50-day moving averages, indicating a sideways market.

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

Bollinger Bands

In case of a decline, the lower boundary of the indicator will act as support around 1.0717.

Indicator Description:

• Moving average (determines the current trend by smoothing volatility and noise). Period 50. Marked in yellow on the chart.
• Moving average (determines the current trend by smoothing volatility and noise). Period 30. Marked in green on the chart.
• MACD indicator (Moving Average Convergence/Divergence). 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 net non-commercial position is the difference between the short and long positions of non-commercial traders.