30.10.202416:48 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on October 30th (Analysis of Morning Trades)

In my morning forecast, I highlighted the 1.0858 level as a decision point for market entry. Let us examine the 5-minute chart to analyze the developments. The price rose, formed a false breakout at that level, and created an excellent selling point, leading to a drop of nearly 30 points. The technical outlook was revised for the second half of the day.

To Open Long Positions on EUR/USD:

The euro's rise was directly linked to strong Eurozone GDP data, which exceeded economists' expectations, indicating a slightly better outlook than recent European Central Bank projections. However, critical data is expected from the U.S., including the Q3 GDP change and ADP employment change for October, with the core personal consumption expenditures index adding to the overall economic backdrop. Positive U.S. data may pressure the pair, pushing it down to new support at 1.0817. This level is where I plan to enter the market. A false breakout formation here would provide a good condition to add long positions to continue the correction, potentially leading back to 1.0858, which the pair couldn't surpass earlier. A breakout and retest of this range would confirm a buying entry, aiming for 1.0900. The furthest target is 1.0927, where I will take profits. If EUR/USD declines and shows no activity near 1.0817 in the afternoon, the market will likely stabilize, returning the pair to the 1.0788 support, challenging buyers. I'll consider entering only after a false breakout there. For an immediate rebound, I plan to buy from the 1.0764 low, with a short-term upward movement of 30-35 points within the day.

To Open Short Positions on EUR/USD:

Sellers performed well, now eyeing support at 1.0817, aligning with today's low. If the pair attempts another rally following weak U.S. data, a false breakout at 1.0858, as analyzed above, will provide an entry point for short positions targeting 1.0817. Breaking and settling below this range, along with a retest from below, will confirm another selling scenario, moving toward 1.0788 and undermining buyers' prospects. The final target is 1.0764, where I will secure profits. If EUR/USD rises in the second half of the day without bearish activity at 1.0858, buyers may push for a larger correction. In this case, I will delay selling until a test of the next resistance at 1.0900, where I'll sell only after a failed consolidation. For an immediate decline, I'll look to open short positions on a rebound from 1.0927, targeting a downward correction of 30-35 points.

The COT report (Commitment of Traders), as of October 22, showed another sharp increase in short positions and a decrease in long ones. Clearly, there is an expectation of active ECB rate cuts, as frequently discussed by European policymakers, alongside a more reserved stance from the Fed. This week's U.S. GDP and labor market data should clarify things, likely affirming that aggressive rate cuts are unnecessary, thereby strengthening the dollar. The COT report shows long non-commercial positions down by 16,160 to 153,159, while short non-commercial positions increased by 29,514 to 181,683, widening the gap by 2,156.

Indicator Signals:

Moving Averages:

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

Note: The moving averages period and prices are analyzed on the H1 hourly chart, differing from the conventional D1 daily moving averages.

Bollinger Bands:

If the pair declines, the lower boundary of the indicator at around 1.0800 will act as support.

Indicator Descriptions:

• Moving Average: Determines the current trend by smoothing volatility and noise. Period – 50 (marked in yellow).
• Moving Average: Determines the current trend by smoothing volatility and noise. Period – 30 (marked in green).
• MACD Indicator: (Moving Average Convergence/Divergence – fast EMA period 12, slow EMA period 26, SMA period 9).
• Bollinger Bands: Period – 20.
• Speculative Traders: Includes individual traders, hedge funds, and large institutions using the futures market for trading purposes.
• Long Non-Commercial Positions: Represents the total open long position of speculative traders.
• Short Non-Commercial Positions: Represents the total open short position of speculative traders.
• Net Non-Commercial Position: The difference between short and long positions of speculative traders.