20.11.202416:51 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on November 20th (Morning Trade Review). The Euro Returns to Falling

In my morning forecast, I highlighted the 1.0567 level as a key point for making market entry decisions. Let us review the 5-minute chart to analyze the developments. A decline and a false breakout at this level provided an opportunity to enter long positions, but the pair failed to sustain upward momentum. For the second half of the day, the technical outlook has been revised.

For Opening Long Positions in EUR/USD:

With no significant U.S. economic data scheduled for the second half of the day, attention will likely shift to statements from Federal Reserve representatives. If the Fed maintains its hawkish stance, traders may have more reasons to buy the U.S. dollar and sell the euro. Therefore, exercise caution when considering long positions.

If selling pressure persists, I will focus on the support level at 1.0531. A false breakout at this level, as discussed earlier, could provide a suitable condition for adding long positions, targeting a correction towards 1.0567. A breakout and retest of this range could confirm a buying opportunity, aiming for 1.0610. The next target would be 1.0653, where I plan to take profits.

If EUR/USD continues to decline and shows no activity around 1.0531, further losses are likely. In such a case, I will consider long positions only after a false breakout at the next support level of 1.0497, the monthly low. Alternatively, I will buy on a rebound from 1.0474, targeting a 30-35 point upward correction.

For Opening Short Positions in EUR/USD:

If the pair rises, sellers will need to defend the resistance level at 1.0567, where moving averages are located slightly above, favoring bearish sentiment. A false breakout at 1.0567, coupled with hawkish Fed statements, could provide an entry point for short positions, targeting a drop to the 1.0531 support level.

A breakout and retest of this range from below could create additional selling opportunities, aiming for a new monthly low at 1.0497. The final target would be 1.0474, where I plan to take profits.

If EUR/USD ignores the Fed's statements and rises further, I will delay selling until the next resistance at 1.0610 is tested, entering short positions only after a failed breakout.

COT Report (Commitment of Traders) Review:

The COT report for November 12 showed a modest increase in long positions and a significant reduction in short positions. The data reflects the Federal Reserve's decision to lower interest rates and recent developments under Donald Trump's presidency.

At current lows, there are likely fewer euro sellers, which may indicate that EUR/USD is finding its bottom and the medium-term bearish market could be reversing. However, there is still insufficient evidence to rely on this report alone. The lack of buyers for the euro is more significant than the reduction in sellers.

The COT report indicates that non-commercial long positions increased by 103 to 160,003, while short positions decreased by 14,113 to 167,113. As a result, the gap between long and short positions narrowed by 3,761.

Indicator Signals:

Moving Averages:The pair is trading slightly below the 30- and 50-day moving averages, indicating renewed pressure.

• Note: The moving averages referenced here are based on the H1 chart and differ from the classic daily moving averages (D1).

Bollinger Bands:If the pair declines, the lower boundary of the Bollinger Bands around 1.0550 will act as support.

Indicator Descriptions:

• Moving Average (MA): Identifies the current trend by smoothing out volatility and noise.
  • Period: 50, marked in yellow on the chart.
  • Period: 30, marked in green on the chart.
• MACD (Moving Average Convergence/Divergence):
  • Fast EMA: Period 12
  • Slow EMA: Period 26
  • SMA: Period 9
• Bollinger Bands:
  • Period: 20
• Non-commercial traders: Speculative participants such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes.
• Long non-commercial positions: The total open long positions held by non-commercial traders.
• Short non-commercial positions: The total open short positions held by non-commercial traders.
• Net non-commercial position: The difference between short and long positions held by non-commercial traders.