EUR/USD: plan for the European session on October 15. COT reports. Bears are pulling the market over to their side. Aim for

To open long positions on EUR/USD, you need:

Yesterday, buyers of the euro tried to retrieve resistance at 1.1756 and even formed a signal from it to buy the euro, but, unfortunately, a strong upward movement did not take place. If you look at the 5-minute chart, you will see how the bulls managed to settle above 1.1756 and defended this level by testing it from top to bottom, trying to build a new wave of growth. Sellers regained control towards the end of the US session, forming a signal to sell the euro by testing it from the bottom up at the 1.1756 level, but so far this setup has not led to a good downward movement.

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Nothing has changed from a technical point of view. Buyers are still focused on resistance at 1.1756, and settling above this level forms a good entry point into long positions while counting on the euro's succeeding growth and also an update of a high at 1.1789. The 1.1824 level will be a distant target, where I recommend taking profits. If the pair is under pressure in the first half of the day since we don't have important fundamental statistics, there is no need to rush to open long positions. Forming a false breakout at the 1.1722 level will be a signal to buy EUR/USD. If bulls are not active at this level, then I recommend postponing long positions until we have updated the low of 1.1688, counting on a correction of 20-30 points within the day.

The Commitment of Traders (COT) report for October 6 showed a reduction in long positions and an increase in short positions, which led to an even greater decrease in the delta. Buyers of risky assets believe in sustaining the bull market, but prefer to proceed with caution, as there is no good news about the eurozone and the pace of economic recovery so far. Thus, long non-commercial positions decreased from 241,967 to 231,369, while short non-commercial positions increased from 53,851 to 57,061. The total non-commercial net position decreased to 174,308, against 188,116 a week earlier. which indicates a wait-and-see attitude of new players. However, bullish sentiments for the euro remain rather high in the medium term.

To open short positions on EUR/USD, you need:

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The bears managed to defend resistance at 1.1756 yesterday afternoon, however the downward movement has occurred. Sellers will have the advantage as long as trading is below this range. Forming the next false breakout at the 1.1756 level will be a signal to open short positions in EUR with the goal of returning to the support area of 1.1722. However, a much more important task is to break out and settle below this range, testing it from the bottom up forms just an excellent entry point for short positions with the goal of pulling down the euro to a low of 1.1688, where I recommend taking profits. In case bears are not active at 1.1756, it is best to postpone sell positions until a larger resistance at 1.1789 has been tested, from where you can open short positions immediately on a rebound, counting on a correction of 20-30 points within the day.

Indicator signals:

Moving averages

Trading is carried out in the area of 30 and 50 moving averages, which again indicates a confusion between buyers and sellers.

Note: The period and prices of moving averages are considered by the author on the H1 hourly chart and differs from the general definition of classic daily moving averages on the D1 daily chart.

Bollinger Bands

A breakout of the lower border of the indicator around 1.1730 will increase pressure on the euro and lead to a larger downward movement for the pair. A breakout of the upper border of the indicator in the 1.1765 area will lead to an increase in EUR/USD.

Description of indicators

  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 50. It is marked in yellow on the chart.
  • Moving average (moving average, determines the current trend by smoothing out volatility and noise). Period 30. It is marked in green on the chart.
  • MACD indicator (Moving Average Convergence/Divergence — convergence/divergence of moving averages) Quick EMA period 12. Slow EMA period to 26. SMA period 9
  • Bollinger Bands (Bollinger Bands). Period 20
  • Non-commercial speculative traders, such as individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet certain requirements.
  • Long non-commercial positions represent the total long open position of non-commercial traders.
  • Short non-commercial positions represent the total short open position of non-commercial traders.
  • Total non-commercial net position is the difference between short and long positions of non-commercial traders.
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