30.09.202013:23 Forex Analysis & Reviews: EUR/USD: plan for the American session on September 30

To open long positions on EURUSD, you need:

Despite the fundamental statistics that showed an improvement in the situation in the German economy, in particular the labor market, the sellers of the euro managed to achieve their goal. However, there was no clear entry into short positions. Let's figure out why. If you look at the 5-minute chart, you will see how the bears are trying to break through the support of 1.1734, however, the test of this level from the bottom up occurred with an exit from this range, which crossed out all plans to sell the euro. Buyers tried several times to return to 1.1734, however, all to no avail. Therefore, the downward movement that was formed was skipped.

At the moment, I have slightly revised the nearest levels and advise buyers to focus on the resistance of 1.1729. A return and consolidation above this range form a good signal to open long positions with the aim of further growth of EUR/USD already in the area of the maximum of 1.1779, where I recommend fixing the profits. It is quite possible that after the release of fundamental statistics for the United States, this breakthrough may occur. It doesn't even matter if it's good or bad. Yesterday's market reaction to the US consumer confidence index confirmed this. The bulls' longer-term target will be a maximum of 1.1826. If the pressure on the euro continues in the second half of the day, I advise you to pay attention to purchases from the level of 1.1685, but subject to the formation of a false breakout, since the bears can resume the downward trend at any time. I advise you to open long positions immediately for a rebound only after testing the minimum of 1.1640, based on a correction of 20-30 points within the day.

To open short positions on EURUSD, you need:

Sellers partially coped with their task and managed to win back a fairly important level, which has now shifted slightly and is located in the area of 1.1729. The formation of a false breakout there in the second half of the day forms an excellent signal for the continuation of sales of the European currency in order to break through and consolidate under the support of 1.1685. If there is no activity on the part of buyers at this level, you can continue to sell the euro with the aim of reducing to the area of 1.1640, where I recommend fixing the profits. A test of this level will also indicate a resumption of the bearish trend in the pair. In the scenario of the bulls returning to the resistance of 1.1729, you should not rush to sell. It is best to wait for the recovery of EUR/USD to the resistance area of 1.1779, and also sell even higher – from the maximum of 1.1826 with the aim of correction of 20-30 points within the day.

Let me remind you that COT reports (Commitment of Traders) for September 22 recorded an increase in both long and short positions, however, the first ones turned out to be more, which led to an increase in the delta. Apparently, such a low euro exchange rate for the first time in the last three months attracts new buyers, even despite the risk of a second wave of coronavirus infection across Europe. For example, long non-profit positions increased from 230,695 to 247,049, while short non-profit positions increased from only 52,199 to 56,227. The total non-commercial net position also rose during the reporting week to 190,822 from 178,576 a week earlier, indicating the bullish market sentiment in the medium term. The more the euro declines against the US dollar, the more attractive it will be for new investors.

Signals of indicators:

Moving averages

Trading is conducted around 30 and 50 daily moving averages, which calls into question the continuation of the upward correction in the pair.

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

If the euro rises in the second half of the day, the upper limit of the indicator around 1.1755 will act as a 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 9
• Bollinger Bands (Bollinger Bands). Period 20
• Non-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 short and long positions of non-commercial traders.