19.11.202413:46 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on November 19th (Analysis of Morning Trades)

In my morning forecast, I focused on the level of 1.0539 as a basis for making market entry decisions. Let's analyze the 5-minute chart to review the developments. A decline and the formation of a false breakout at this level allowed entry into long positions, resulting in a 20-point rise. The technical picture for the second half of the day has since been revised.

For Opening Long Positions on EUR/USD:

Eurozone inflation data matched economists' expectations, but the euro reacted by declining, returning to its sideways channel. In the second half of the day, data from the U.S. housing market may influence the pair. Weak reports on building permits and new housing starts could enable euro buyers to regain control. If selling pressure on the pair persists, I will focus on the support zone at 1.0531. A false breakout at this level, similar to the conditions discussed earlier, would create a suitable opportunity to increase long positions as part of a correction. This could lead to a rise toward 1.0567, a level established during the morning session.

A breakout and subsequent retest of this range would confirm a valid entry point for buying, with the next targets at 1.0605 and 1.0653, where I will lock in profits. If EUR/USD continues to decline and there is no activity around 1.0531, I will consider a false breakout near the next support level at 1.0497 (the monthly low) as a signal for entering long positions. Additionally, I will consider opening long positions on a rebound from 1.0474, targeting a 30-35 point upward correction within the day.

For Opening Short Positions on EUR/USD:

If the pair rises, sellers will need to defend the resistance level at 1.0567, supported by moving averages. A false breakout at this level, combined with strong U.S. labor market data, would provide an ideal entry point for short positions, targeting a decline to the support level of 1.0531, established during the morning session.

A breakout and subsequent retest below this range would confirm another short entry, aiming for a new monthly low at 1.0497, further strengthening the bearish trend. The final target will be 1.0474, where I plan to lock in profits. If EUR/USD rises following the data release but the data is ignored, euro buyers may attempt to establish a correction. In this case, I will delay selling until the next resistance at 1.0605 is tested. I plan to open short positions immediately on a rebound from 1.0605, targeting a 30-35 point downward correction.

Commitments of Traders (COT) Report:

The COT report for November 12 showed a modest increase in long positions (+103 to 160,003) and a sharp reduction in short positions (-14,113 to 167,113). This reduction in short positions suggests that fewer traders are willing to sell the euro at current lows, which could indicate the pair is approaching a bottom. However, the lack of significant euro buying pressure is a more critical factor than the decline in short positions.

While these trends may hint at a potential reversal of the medium-term bearish market, there is currently insufficient data to confirm this scenario. For now, the market remains bearish. The widening gap between long and short positions (+3,761) reflects the cautious sentiment among traders.

Key Indicator Signals:

Moving Averages:Trading is occurring just below the 30- and 50-day moving averages, suggesting renewed selling pressure on the pair.

Bollinger Bands:In the event of a decline, the lower Bollinger Band at 1.0531 will act as key support.

Indicator Descriptions:

• Moving Average (MA): Identifies the current trend by smoothing volatility and noise.
  • 50-period MA: Marked in yellow on the chart.
  • 30-period MA: Marked in green on the chart.
• MACD (Moving Average Convergence/Divergence): Tracks momentum and trend changes.
  • Fast EMA: Period 12.
  • Slow EMA: Period 26.
  • Signal Line (SMA): Period 9.
• Bollinger Bands: Measures price volatility and identifies potential reversal zones.
  • Period: 20.
• Non-Commercial Traders: Includes speculators such as hedge funds and institutions using futures markets for speculative purposes.
  • Long Positions: Total long open positions held by non-commercial traders.
  • Short Positions: Total short open positions held by non-commercial traders.
  • Net Non-Commercial Position: The difference between short and long positions of non-commercial traders.

• Long Positions:Consider entering long positions after a false breakout near 1.0531, targeting 1.0567, 1.0605, and eventually 1.0653. If the pair declines further, wait for a false breakout near 1.0497 to enter. Alternatively, buy on a rebound from 1.0474, targeting a 30-35 point correction.
• Short Positions:Short positions can be initiated after a false breakout at 1.0567 or on a breakout and retest below 1.0531, targeting 1.0497 and 1.0474. If the pair rises toward 1.0605, consider selling on a rebound for a 30-35 point correction.