EUR/USD: plan for the European session on November 25. COT reports. Bulls to push euro to new monthly high

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

If you read yesterday's afternoon forecast, you will see that I mentioned a false breakout at 1.1890 and advised you to open short positions in the euro from this level while aiming for 1.1844, which happened. This signal does not need additional comments. However, I also advised you to open long positions from the 1.1844 level, subject to forming a false breakout there. I marked this entry point on the 5-minute chart, which also enables you to take more than 40 points of profit from the market.

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Weak data on the US economy which was released yesterday afternoon brought back the demand for the euro, and the bulls went above the 1.1890 range for their sixth attempt. They did not meet any opposition at this level. Settling above 1.1890 during the Asian session retains all chances for the upward trend. Forming a false breakout in this area in the first half of the day against the background of the absence of important fundamental statistics on the European economy produces a new entry point into long positions. In this case, buyers will then aim for a high of 1.1929. However, the next target will still be resistance at 1.1964, where I recommend taking profits. In case EUR/USD falls back to the 1.1890 area in the first half of the day and bulls are not active at this level, I recommend not to rush into buy positions, but to wait for a downward correction to the area of yesterday's support at 1.1844, from where you can buy the euro immediately on a rebound, based on an upward correction of 15-20 points. A larger support level is seen only at this week's low in the 1.1802 area, where you can also buy the euro immediately on the first test.

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

The initial challenge is to reclaim the 1.1890 level, which they lost in today's Asian session due to the weak report on the consumer confidence indicator in the United States. Settling below 1.1890 and testing it from the bottom up produces a more convenient entry point for short positions, in hopes to bring back the downward trend. In this case, the nearest target will be the low of 1.1844, from which one could observe the pair's active growth. However, updating this level will only be an indication that trading remains in a horizontal channel. A breakdown and being able to settle below this range will lead EUR/USD to the area of weekly lows at 1.1802, where I recommend taking profits. If the bulls turn out to be stronger and continue to push the pair up amid the absence of eurozone data, then it is best not to rush to sell, but wait until resistance at 1.1929 has been updated, where a false breakout will be a signal to open short positions in the euro. I recommend selling EUR/USD immediately on a rebound but only from a high of 1.1964, counting on a correction of 15-20 points within the day.

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The COT report for November 17 showed an increase in long and short positions. Despite this, buyers of risky assets believe that the bull market will continue since the delta is on their side. Long non-commercial positions rose from 202,374 to 203,551, while short non-commercial positions increased from 67,087 to 69,591. The total non-commercial net position fell from 135,287 to 133,960 a week earlier. Take note that the delta has been declining for eight consecutive weeks, which confirms the euro buyers' reluctance to enter the market in the current conditions. We can talk about the euro's recovery only when European leaders have settled differences with Poland and Hungary, and also when the UK negotiates a new trade deal with Brussels. Otherwise, you will have to wait until restrictive measures have been lifted, which were implemented due to the second wave of coronavirus in many EU countries.

Indicator signals:

Moving averages

Trading is carried out above 30 and 50 moving averages, which indicates that the euro will continue to rise in the short term.

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

In case the pair falls, support will be provided by the lower border of the indicator around 1.1860.

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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