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EUR/USD: the plan for the American session on October 29 (analysis of morning deals). There were no people willing to buy

Relevance up to 07:00 2021-10-30 UTC–4

To open long positions on EURUSD, you need:

In the first half of the day, I paid attention to the 1.1659 level and recommended making decisions from it. Let’s look at the 5-minute chart and talk about what happened. Strong inflation in the eurozone and weak growth rates of the German economy in the 3rd quarter of this year left mixed feelings among investors, which led to a decline in the euro to the support area of 1.1659. The formation of a false breakdown there formed a signal to open long positions in continuation of yesterday’s trend, but after a jump up by 15 points, everything ended and the pair again descended to the area of 1.1659. After that, a breakdown followed, but without a reverse test – for this reason, I did not enter into short positions against the trend from this level. In the afternoon, the picture changed slightly.

Buyers have a problem since even at current lows, no people are willing to open new long positions. A serious inflationary jump in the eurozone is not helping the bulls much yet, so they are counting on the pair’s continued growth. In the afternoon, everyone will focus on the return of the 1.1674 resistance, which they missed today following the results of European trading. Only a breakdown and a test of this level from top to bottom, together with weak data on Americans’ spending, form an excellent entry point into long positions, which will open the way to a maximum of 1.1699. Only a similar breakthrough of this range will lead EUR/USD to the area of 1.1724 and 1.1749, where I recommend fixing the profits. In the event of a decline in EUR/USD in the afternoon and the absence of buyers at 1.1647, and there are moving averages limiting the downward correction of the pair, an equally important task for the bulls will be to protect the next support of 1.1626. Only the formation of a false breakdown there forms a good entry point into long positions. In the absence of bulls there, I advise you to postpone purchases at 1.1568, where you can buy immediately for a rebound based on a correction of 15-20 points within a day.

To open short positions on EURUSD, you need:

The initial task of the sellers of the euro remains to protect the resistance of 1.1674. Only another formation of a false breakdown there, along with strong data on the growth of spending and income of Americans, as well as a rise in consumer sentiment from the University of Michigan – only this will lead to the formation of a good entry point into short positions, which will again push the pair to the support of 1.1674 formed in the morning. A breakout and a test of 1.1674 from the bottom-up form an additional signal to open new short positions already to reduce EUR/USD to the area of 1.1626. A breakdown of this range will also demolish several buyers’ stop orders, which will quickly collapse the euro by 1.1586, where I recommend fixing the profits. In the scenario of the pair’s growth in the afternoon and the absence of sellers at the level of 1.1674, it is best to postpone sales until this month’s maximum is updated – 1.1699. It is possible to open short positions immediately for a rebound based on a downward correction of 15-20 points even higher – from the level of 1.1724.

The COT report (Commitment of Traders) for 19 recorded a reduction in both short and long positions, which led to a slight recovery of the negative delta, as more sellers left the market than buyers. Last week, inflation in the eurozone came out, which increased and coincided with economists’ expectations. It forced many representatives of the European Central Bank to talk again about changes in monetary policy. However, the fact that almost everyone adhered to a wait-and-see attitude and continued stimulus measures in the form of bond purchases after the completion of the PEPP program in March next year put some pressure on the European currency. The slowdown in activity in the manufacturing and services sectors of the eurozone also did not allow euro buyers to get beyond the 17th figure. However, the key problem in the shorter term, which harms the growth of the euro, is the sharp spread of the fourth wave of coronavirus infection throughout the European Union. As for the United States of America, the good pace of recovery of the American economy continues to support the US dollar. The fact that the Federal Reserve is already seriously considering curtailing the bond purchase program at the next meeting in November will also limit the upward potential of the euro against the US dollar. The COT report indicates that long non-commercial positions decreased from the level of 202,512 to the level of 193,320, while short non-commercial positions dropped from the level of 220,910 to the level of 205,427. At the end of the week, the total non-commercial net position decreased and amounted to -12,107 against -18,398. The weekly closing price rose to the level of 1.1613 against 1.1553.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates the preservation of the upward potential of the euro in the afternoon.

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

Bollinger Bands

A breakthrough of the lower limit of the indicator in the area of 1.1647 will lead to an instant fall of the euro. In the case of growth, the upper limit of the indicator around 1.1699 will act as resistance.

Description of indicators

Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 50. The graph is marked in yellow.Moving average (moving average determines the current trend by smoothing out volatility and noise). Period 30. The graph is marked in green.MACD indicator (Moving Average Convergence / Divergence – moving average convergence/divergence) Fast EMA period 12. Slow EMA period 26. SMA period 9Bollinger Bands (Bollinger Bands). Period 20Non-profit 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 the short and long positions of non-commercial traders.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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