EUR/USD: plan for the European session on November 17. COT reports. Euro buyers actively push back, ready to break through

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

The European currency was best sold at 1.1868 yesterday morning. The attempt to settle above 1.1868 failed and there was also a lack of buying activity, all this caused the EUR/USD pair to return to the area below this level and a good entry point for short positions to appear, which quickly pushed the pair into the area of the morning support at 1.1832. The bears tried to secure the area below 1.1832 closer to the US session, having tested it from the bottom up, which produced a fairly good entry point for short positions, but this did not lead to a serious sale and the bulls regained control over this level by the middle of the US session. Testing 1.1832 from top to bottom became a signal to buy the euro, which was realized today in the Asian session.

But, before talking about the prospects for the pair's movement, let's see what happened in the futures market and how the Commitment of Traders positions changed. Last week kept the market in balance due to the news that the third trials of the coronavirus vaccine were successful, and the fundamental reports on the US economy were not very encouraging. The rise in coronavirus cases continues to put pressure on risky assets, as the data show. The Commitment of Traders (COT) report for November 3 showed a reduction in long positions and an increase in short positions. Despite this, buyers of risky assets still believe in the bull market, although they prefer to proceed with caution. Thus, long non-commercial positions fell from 217,443 to 208,237, while short non-commercial positions rose from 61,888 to 67,888. The total non-commercial net position fell from 155,555 to 140,349 a week earlier. It is worth noting that the delta has been declining for seven consecutive weeks, which confirms the euro buyers' lack of desire to enter the market in the current conditions. Growth will only begin after Joe Biden's victory as he intends to endow the American economy with the next largest monetary aid package worth more than $2 trillion.

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In regards to the pair's technical picture, it has not changed in any way compared to yesterday. The initial task of the bulls is to break and settle above the high of 1.1868, which produces a good entry point for continuing the upward correction and will open a direct road to the monthly high of 1.1915, where I recommend taking profits. Weak data on the US economy may strengthen the demand for the euro, especially in the field of retail sales, which will be released once the US session opens. The breakout of 1.1915 opens an opportunity to renew the highs of 1.1964 and 1.2008. In the event that EUR/USD falls today in the morning, an equally important task for the bulls will be to protect support at 1.1832. Forming a false breakout there, similar to yesterday, forms an entry point into long positions. In case bulls are not active in the 1.1832 area, it is better to postpone buy positions until the 1.1797 level has been updated. However, you can open long positions from it on the initial test, counting on a correction of 15-20 points within the day. Larger support is seen in the 1.1749 area, where you can buy the euro immediately on a rebound, counting on a correction of 15-20 points within the day.

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

The initial task of the sellers is to protect resistance at 1.1868. Forming a false breakout there, similar to yesterday, will be another signal to open short positions in the euro, which will push the pair back to the support of 1.1832. Only a real breakout and being able to get the pair to settle below this range and testing it from the bottom up produces an additional entry point to short positions in hopes of bringing back the downward trend. In this case, the nearest target of the bears will be the low of 1.1797, which was not reached yesterday. However, even a test of this level will only be an indication that the pair is stuck in a horizontal channel. Going beyond and being able to settle below this range will lead EUR/USD to the area of the lower border of the horizontal channel at 1.1749, where I recommend taking profits. If the bulls turn out to be stronger and continue to push the pair up against the background of the absence of important fundamental statistics in the first half of the day, then it is best not to rush to sell, but wait until the larger resistance at 1.1915 has been updated. You can sell from this level during the first test, counting on a correction of 15-20 points. However, for the market to reverse, a false breakout must be present. I recommend opening short positions in EUR/USD immediately on a rebound, but only from a new monthly high of 1.1964.

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Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates the continued bull market.

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 the classic daily moving averages on the daily D1 chart.

Bollinger Bands

A breakout of the upper border of the indicator around 1.1868 will lead to a new wave of euro growth. Pressure on the euro will increase in case of a breakout of the lower border of the indicator in the 1.1820 area.

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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