03.10.202414:58 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on October 3 (Review of Morning Trades). The Euro Held Its Ground

In my morning forecast, I highlighted the level of 1.1047 as the basis for my market entry decisions. We will now examine the 5-minute chart to analyze what happened. A rise followed by a false breakout around 1.1047 provided a sell signal for the euro, but after moving 15 points down, the pressure on the pair eased. The technical outlook for the second half of the day remains unchanged.

To open long positions on EUR/USD:

The reports released on service sector activity in Eurozone countries did not disappoint, which is a positive sign. This offers hope that the delayed response by the European Central Bank in cutting interest rates will support the Eurozone economy, which has experienced a slowdown after a strong first half of the year. In the second half of the day, we expect similar reports on the U.S. services PMI and the composite PMI for September. We do not expect anything particularly positive from these reports, which gives the euro a chance to rebound. Additionally, the U.S. unemployment claims report will be released, along with speeches by FOMC members Raphael Bostic and Neel Kashkari. Recently, their comments have supported the dollar. If there is a bearish reaction to their speeches and strong U.S. data, a false breakout around 1.1007 could provide a good opportunity to open new long positions, aiming for a return to 1.1047—resistance that was not breached in the first half of the day. A breakout and retest of this range could push the pair towards 1.1081. The most distant target will be the 1.1113 high, where I plan to take profits. If EUR/USD declines and shows no activity around 1.1007 in the second half of the day, which is more likely, pressure on the pair will increase, leading to another significant sell-off. In this case, I would consider entering the market only after a false breakout near the next support at 1.0979. I plan to open long positions immediately on a small rebound from 1.0952, aiming for a 30-35 point intraday upward correction.

To open short positions on EUR/USD:

Sellers have a chance to push the euro lower, especially after the active defense of the 1.1047 level in the first half of the day. If U.S. data does not cause a sharp upward reaction, I will focus on defending the 1.1047 resistance level. A false breakout here, similar to what I described earlier, will provide a good signal to open short positions, aiming for a correction towards the 1.1007 support. I expect new and fairly active buyer reactions at that level. However, a breakout and consolidation below 1.1007, followed by a retest of this range, will provide another selling opportunity, targeting a move towards 1.0979. The most distant target will be the 1.0952 level, which would establish a new bearish trend. I plan to take profits at that level. If EUR/USD rises and sellers fail to defend 1.1047, where the moving averages also support the bears, buyers will attempt to regain control of the market. In that case, I will delay selling until the next resistance at 1.1081. I will also sell there, but only after a failed consolidation. I plan to open short positions immediately on a rebound from 1.1113, targeting a 30-35 point downward correction.

The COT (Commitment of Traders) report for September 24 showed a slight increase in both long and short positions, maintaining the balance of power on the side of risk asset buyers. Clearly, the Federal Reserve's decision to cut rates by 0.5% continues to attract new euro buyers into the market while prompting the selling of the dollar, as the chances of more aggressive easing in November remain high. What the Fed does next will depend on the upcoming labor market reports. I will base my strategy on these. However, this does not negate the medium-term upward trend for the pair, and the lower the pair goes, the more attractive it becomes for buying. The COT report indicated that long non-commercial positions increased by 5,514, reaching 187,795, while short non-commercial positions grew by 3,462, to 116,097. As a result, the gap between long and short positions widened by 1,960.

Indicator Signals:

Moving Averages

Trading is occurring below the 30 and 50-day moving averages, indicating a decline in the euro.

Note: The moving averages' periods and prices are based on the H1 hourly chart, which differs from the general definition of classical daily moving averages on the D1 daily chart.

Bollinger Bands

In case of a decline, the lower boundary of the indicator near 1.1030 will act as support.

Indicator Descriptions:

• Moving average: Determines the current trend by smoothing volatility and noise. Period 50. Marked in yellow on the chart.
• Moving average: Determines the current trend by smoothing volatility and noise. Period 30. Marked in green on the chart.
• MACD Indicator: Moving Average Convergence/Divergence. Fast EMA period 12. Slow EMA period 26. SMA period 9.
• Bollinger Bands: Period 20.
• Non-commercial traders: Speculators such as individual traders, hedge funds, and large institutions who use the futures market for speculative purposes and meet specific requirements.
• Long non-commercial positions: The total long open position of non-commercial traders.
• Short non-commercial positions: The total short open position of non-commercial traders.
• Total non-commercial net position: The difference between short and long positions of non-commercial traders.