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01.11.202413:44 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on November 1st (Review of Morning Trades) – Euro Declines Ahead of Key Data

Relevance up to 07:00 2024-11-02 UTC--4

In my morning forecast, I highlighted the 1.0866 level as a decision point for market entry. Let's look at the 5-minute chart to see what happened. The decline, followed by a false breakout, offered an excellent entry point for buying, but the pair didn't see a substantial upward movement. The technical outlook was slightly revised for the second half of the day.

Exchange Rates 01.11.2024 analysis

To Open Long Positions on EUR/USD:

Given the expected data and volatility, I decided to stay away from nearby support and resistance levels. Strong data on U.S. unemployment and nonfarm payrolls above economists' forecasts will likely push the euro down and strengthen the dollar. Otherwise, the euro could have a solid chance of establishing a new upward trend. If the market responds bearishly to the data, a false breakout around 1.0849—just above the moving averages—could support additional long positions, setting the path toward the 1.0887 level, which we couldn't break above earlier today. A breakout and retest of this range will confirm an entry for a buy position with a target of 1.0915. The furthest target will be the 1.0935 high, where I plan to take profits. If EUR/USD declines and there's no activity around 1.0849 in the second half of the day, the euro risks a substantial drop. In that case, I will enter only after a false breakout around the next support at 1.0813. I plan to open long positions on a rebound from 1.0788 with a target of a 30-35 point upward correction within the day.

To Open Short Positions on EUR/USD:

Sellers are expecting strong U.S. labor market data, which would allow them to regain control of the market. Otherwise, I expect the first bearish pressure around 1.0887. A false breakout there will offer a short entry with a target toward support at 1.0849, though it will depend on the data. A breakout and consolidation below this range, followed by a retest from below, will serve as another selling opportunity, aiming toward 1.0813, which would dim buyers' prospects for growth. The furthest target will be the 1.0788 level, where I will take profit. If EUR/USD rises in the second half of the day and there's no bearish presence at 1.0887, buyers may get a chance to build a new upward trend. In that case, I will delay selling until the next resistance at 1.0915, where I will only sell after an unsuccessful consolidation attempt. I plan to open short positions immediately on a rebound from 1.0935, aiming for a 30-35 point downward correction.

Exchange Rates 01.11.2024 analysis

In the Commitment of Traders (COT) report dated October 22, there was a sharp increase in short positions and another reduction in longs. Clearly, everyone is betting on an aggressive rate cut by the European Central Bank, as European policymakers have frequently indicated, while expecting the Fed to take a more measured approach. Most likely, this week's U.S. GDP and labor market data will clarify things, convincing markets there's no need for aggressive rate cuts, which will further support the dollar. The COT report shows that, over the last reporting period, long non-commercial positions fell by 16,160 to 153,159, while short non-commercial positions increased by 29,514 to 181,683. Consequently, the gap between long and short positions jumped by 2,156.

Exchange Rates 01.11.2024 analysis

Indicator Signals:

Moving Averages:

The pair trades around the 30 and 50-day moving averages, indicating market indecision ahead of the data.

Note: The moving average periods and prices are observed by the author on the H1 hourly chart, differing from the traditional definition on the D1 daily chart.

Bollinger Bands:

In case of a decline, the lower boundary of the indicator at around 1.0849 will act as support.

Indicator Descriptions:

  • Moving Average: Defines the current trend by smoothing volatility and noise. Period – 50, marked in yellow on the chart.
  • Moving Average: Defines 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 like individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet specific requirements.
  • Long Non-Commercial Positions: Represent the total open long positions of non-commercial traders.
  • Short Non-Commercial Positions: Represent the total open short positions of non-commercial traders.
  • Non-Commercial Net Position: The difference between short and long positions of non-commercial traders.

*تعینات کیا مراد ہے مارکیٹ کے تجزیات یہاں ارسال کیے جاتے ہیں جس کا مقصد آپ کی بیداری بڑھانا ہے، لیکن تجارت کرنے کے لئے ہدایات دینا نہیں.

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