empty
20.10.2022 01:08 PM
EUR/USD: trading plan for American session on October 20 (analysis of morning trades). EUR stuck in sideways channel amid low market volatility

In the morning article, I turned your attention to the level of 0.9758 and recommended making decisions with this level in focus. Now, let's look at the 5-minute chart and try to figure out what actually happened. A sharp decrease in market volatility following the publication of Germany's Producer Price Index. The reading once again jumped. Therefore, the pair is trapped in the sideways channel. The pair also failed to reach the levels indicated in the morning article. So, there were no entry points to the market in the morning. The technical outlook remained unchanged for the American session.

This image is no longer relevant

When to open long positions on EUR/USD:

The second half of the day is going to be more eventful. The Philadelphia Fed Manufacturing Index and the US initial jobless claims report are due. If the readings are in line with the forecasts, readers are likely to focus their attention on the report on the existing home sales report and the speeches of Fed policymakers. They are sure to speak in favor of further monetary tightening. It is a bullish factor for the US dollar in the short term perspective. If the pair declines, only a false breakout of 0.9758 will give an excellent buy signal with the prospect of a rise to 0.9801. Yesterday, the pair failed to advance above this level. There are moving averages in this range, which will limit the upward movement of the pair. Bulls are likely to regain the upper hand only if a false breakout of this level and a downward test take place. It might happen already during the American session. If so, it may trigger an upward reversal. Bears will have to close Stop Loss orders. It will generate an additional buy signal with the possibility of a jump to 0.9835. It could also strengthen the bullish trend that has been unfolding since October 13. If the pair consolidates above 0.9835, it will open the path to 0.9871 where I recommend locking in profits. If EUR/USD declines and bulls show no activity at 0.9758, buyers will completely lose control of the market. Hence, the pressure on the euro will escalate. It will lead to the formation of a further downward channel and a fall to 0.9719. It is better to open long positions after a false breakout of this level takes place. You can buy EUR/USD immediately at a bounce from 0.9679 or 0.9635, keeping in mind an upward intraday correction of 30-35 pips.

When to open short positions on EUR/USD:

The bears are also sitting on the sidelines. However, the longer they remain inactive, the higher the risk of a sharp recovery of the euro. If so, the euro is likely to win back yesterday's losses rather quickly. The pair's trajectory partially depends on the US economic reports. Yet, technical indicators may change rapidly, signaling a bullish bias. It is better to open short positions after a false breakout of 0.9801, which will give an excellent sell signal. The price may return to 0.9758, the lower border formed by the results of yesterday's trading. Given that it will be the fourth attempt to break through this level, sellers are likely to finally push the price to 0.9758. A drop below this level as well as an upward test will provide a sell signal for EUR/USD. It will force bulls to close their Stop Loss orders. If this scenario comes true, the pair may decrease to 0.9719. A more distant target will be the 0.9679 level where I recommend locking in profits. If EUR/USD rises during the US session and bears show no energy at 0.9801, demand for the pair will increase. A strong upward correction is likely to occur. In this case, I advise you to cancel short positions until a false breakout of 0.9835 takes place. You can sell EUR/USD immediately at a bounce from the weekly high of 0.9871 or from 0.9917, keeping in mind a downward intraday correction of 30-35 pips.

This image is no longer relevant

Commitments of Traders:

The COT report for October 11 logged a sharp fall in long positions and a rise in short ones. It seems that traders were bracing for the release of the US inflation and retail sales reports. It appears that taming inflation has become a real challenge for the Fed. As the September report shows, inflation slowed just by 0.1% from the previous reading. This is why the US regulator is likely to remain hawkish or become even more aggressive. Notably, it has been a while since the last mass sell-off of the euro below the parity level. In fact, such factors as geopolitical tensions and the tightening cycle of the Federal Reserve are not enough to push the pair lower. Therefore, it is better to open long positions on the euro in the medium term. The COT report revealed that the number of long non-commercial positions dropped by 3,255 to 196,136, while the number of short non-commercial positions grew by 2,928 to 158,637. In a week, the total non-commercial net position remained positive and amounted to 37,499 versus 43,682. Investors use this as an opportunity to buy the cheaper euro below parity and accumulate long positions, hoping for the end of the crisis and the pair's recovery in the long run. The weekly closing price decreased to 0.9757 from 1.0053.

This image is no longer relevant

Signals of technical indicators

Moving averages

EUR/USD is trading slightly below the 30- and 50-period moving averages. It means that bears are holding the upper hand.

Remark. The author is analyzing the period and prices of moving averages on the 1-hour chart. So, it differs from the common definition of classic daily moving averages on the daily chart.

Bollinger Bands

If EUR/USD moves up, the indicator's upper border at 0.9800 will act as resistance.

A breakout of the upper border at about 1.1337 will trigger a new bullish wave of EUR. Alternatively, a breakout of the lower border at about 1.1305 will escalate pressure on EUR/USD.

Definitions of technical indicators

  • Moving average recognizes an ongoing trend through leveling out volatility and market noise. A 50-period moving average is plotted in yellow on the chart.
  • Moving average identifies an ongoing trend through leveling out volatility and market noise. A 30-period moving average is displayed as the green line.
  • MACD indicator represents a relationship between two moving averages that is a ratio of Moving Average Convergence/Divergence. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. A 9-day EMA of the MACD called the "signal line".
  • Bollinger Bands is a momentum indicator. The upper and lower bands are typically 2 standard deviations +/- from a 20-day simple moving average.
  • Non-commercial traders - speculators such as retail traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet certain requirements.
  • Non-commercial long positions represent the total long open position of non-commercial traders.
  • Non-commercial short positions represent the total short open position of non-commercial traders.
  • The overall non-commercial net position balance is the difference between the short and long positions of non-commercial traders.
Miroslaw Bawulski,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

如何在5月7日交易GBP/USD貨幣對?新手的簡單技巧和交易分析

英鎊/美元對在週二呈現顯著的上升走勢,儘管它仍位於一個橫盤通道內,這可能並非所有交易者立即可見。然而,若在1小時圖縮小比例下查看,可以看出價格自4月16日以來一直在1.3203和1.3440之間進行交易。

Paolo Greco 06:55 2025-05-07 UTC+2

如何在5月7日交易歐元/美元貨幣對?簡單的提示和新手交易分析

週二,歐元/美元貨幣對完全呈現出平穩的交易狀態。全天之間,無論是在歐元區還是在美國,均沒有重大報告或事件發生,因此這種平穩的走勢幾乎毫無中止的可能性。

Paolo Greco 06:55 2025-05-07 UTC+2

2023年5月7日英鎊/美元的交易建議和分析:英鎊不浪費時間

週二,英鎊兌美元(GBP/USD)貨幣對突然且出人意料地恢復了上升趨勢。儘管歐元陷於平穩市場中,英鎊卻顯示出強勁的上漲,遑論任何顯著的理由。

Paolo Greco 03:35 2025-05-07 UTC+2

2023年5月7日,歐元/美元交易建議和分析:市場持續停滯不前

周二,歐元/美元貨幣對繼續在相同的橫盤區間內交易——在一個橫盤中較小的橫盤。更大的橫盤通道介於1.1274到1.1426之間。

Paolo Greco 03:35 2025-05-07 UTC+2

GBP/USD:5月6日美國交易時段交易計劃(早盤交易回顧)

在我今天早上的預測中,我注意到了1.3309這一水準,並計劃根據該水準制定市場進入決策。讓我們來看看5分鐘圖並分析發生了什麼。

Miroslaw Bawulski 18:52 2025-05-06 UTC+2

EUR/USD: 5月6日美國交易時段計畫(晨間交易回顧)

在我早上的預測中,我強調了1.1346這一水平,並計劃根據這一水平做出交易決策。讓我們來看看5分鐘的圖表,分析一下那裡發生了什麼。

Miroslaw Bawulski 18:49 2025-05-06 UTC+2

如何在5月6日交易英鎊/美元貨幣對?初學者的簡單提示和交易分析

週一,英鎊兌美元貨幣對繼續嚴格地橫盤交易。儘管對英鎊來說,我們並未看到明確定義的平盤區域,但偏向仍然是橫盤多於上升。

Paolo Greco 05:40 2025-05-06 UTC+2

如何在5月6日交易歐元/美元對?初學者簡單技巧與交易分析

週一,歐元/美元貨幣對再次出現上下波動的交易,確認了市場是處於盤整階段。價格已經在1.1275和1.1424之間波動超過三周的時間。

Paolo Greco 05:40 2025-05-06 UTC+2

2023年5月6日英鎊/美元交易建議與分析:特朗普對抗ISM

週一,GBP/USD 貨幣對試圖啟動持續數月的上升趨勢的新一波漲勢。然而,在當日下半場,市場意外地對美國 ISM 服務業 PMI 報告做出了反應,使得美元得以稍微改善其日內地位。

Paolo Greco 03:32 2025-05-06 UTC+2

5月6日EUR/USD交易建議與分析:驚訝且令人難以置信

週一,歐元/美元貨幣對從早上開始恢復了其最喜愛的活動——朝北移動。據悉,經過三週的暫停,唐納德·特朗普決定為市場帶來一些「新意」,引入了新的關稅。

Paolo Greco 03:32 2025-05-06 UTC+2
现在无法通话?
提出您的问题,用 在线帮助.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.