19.10.202013:32 Forex Analysis & Reviews: EUR/USD: plan for the American session on October 19 (analysis of morning deals)

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to purchases from the level of 1.1722. On the 5-minute chart, the bulls are taking this range, however, it was not possible to wait for the formation of a more convenient entry point for long positions on the top-down test of the 1.1722 level. As a result, this deal was missed, although it was profitable. We can also see that although the pair stopped at the 1.1756 level, there was no active downward movement from it, which negates the sell signal, at least until a new suitable formation is formed.

Due to the growth of the euro, the nearest support and resistance levels had to be revised. At the moment, the task of the bulls is to break through and consolidate above the resistance of 1.1770, which will open a direct road to the next weekly maximum in the area of 1.1797, where I recommend fixing the profits. It is unlikely to expect a more active growth of EUR/USD to the area of the maximum of 1.1824, without support from fundamental statistics. A more correct signal to buy EUR/USD will be a decline and the formation of a false breakout in the support area of 1.1739. You can open long positions immediately for a rebound from the minimum of 1.1704, where the new lower border of the ascending price channel also passes. However, in the first test, you should not expect more than 15-20 points of rebound.

To open short positions on EURUSD, you need to:

Sellers will try to protect the resistance of 1.1770, which emerged at the end of trading in the first half of the day. However, do not rush to sell euros. It is best to wait for the formation of a false breakout in the area of 1.1770, which will lead to the formation of a larger downward wave in the support area of 1.1739. An equally important task for the bears to return the initiative to their own hands will be to break through this range, fixing under which will form a new sell signal for EUR/USD with the main goal of testing the minimum in the area of 1.1704, from which all the bullish movement was formed today. If the bulls turn out to be stronger in the second half of the day, it is best to postpone sales until the high of 1.1797 is updated, based on a correction from it of 15-20 points within the day.

Let me remind you that the COT report (Commitment of Traders) for October 13 recorded a reduction in long positions and an increase in short ones, which led to an even greater decrease in the delta. But despite this, buyers of risky assets believe in the continuation of the bull market, but prefer to proceed cautiously, as there is no good news on the Eurozone yet. So, long non-commercial positions declined from a level of 369,231 to 228,295, while short non-commercial positions increased from 57,061 to 59,658. The total non-commercial net position fell to 168,637, compared to 174,308 a week earlier, which indicates a wait-and-see attitude of new players. However, bullish sentiment for the euro in the medium term remains quite high. The stronger the euro declines against the US dollar at the end of this year, the more attractive it will be for new investors.

Signals of indicators:

Moving averages

Trading is conducted above 30 and 50 daily moving averages, which indicates an active attempt by euro buyers to take over the market.

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 classic daily moving averages on the daily chart D1.

Bollinger Bands

If the pair declines, support will be provided by the average border of the indicator in the area of 1.1725, from which today you can buy euros immediately for a rebound.

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 the short and long positions of non-commercial traders.