EUR/USD: plan for the American session on November 5 (analysis of morning deals)

Trading 05 Nov 2020 Donner votre avis

To open long positions on EURUSD, you need:

In my morning forecast, I paid attention to the level of 1.1765 and recommended that you act from it if several conditions are met. If you look at the 5-minute chart, you will see how the bulls probed the resistance of 1.1765 at the beginning of the day, and without meeting any resistance from the bears, they formed a good entry point into long positions to continue the bullish trend. The upward movement was more than 50 points.

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The sharp collapse in retail sales in the Eurozone did not affect the mood of market participants. At the same time, many traders are counting on the victory of Joe Biden in the presidential election, who is still ahead of Donald Trump in the number of votes. At the moment, the primary task of the bulls will be to break through and consolidate above the resistance of 1.1814. A test of this level from top to bottom will lead to the formation of a new signal to open long positions with an exit to a maximum of 1.1864, where I recommend fixing the profits. However, in the afternoon, you should pay attention to the Federal Reserve meeting on interest rates, which may limit the upward potential of the euro. In the case of a downward correction in the second half of the day, only the formation of a false breakout at the level of 1.1759 will signal the opening of long positions in the continuation of the upward trend. If the bulls do not show activity in this range, it is best to postpone long positions until the low of 1.1701 is updated, based on a correction of 15-20 points within the day. There are also moving averages that play on the side of euro buyers.

To open short positions on EURUSD, you need to:

Sellers need to protect the resistance of 1.1814, as it is the only one that keeps the pair from a new, larger wave of euro growth. An unsuccessful consolidation at this level, followed by a return under it and a test from the bottom up, will be a signal to open short positions in the continuation of the downward trend. But an equally important goal for the bears will be to regain the support of 1.1759, which they missed in the first half of the day. Only a test of this level from the bottom up will form another point for selling EUR/USD with an exit to the minimum of 1.1701. A breakthrough in this area will depend entirely on the results of the US election. A breakout of 1.1701 will open a direct path to the lows of 1.1655 and 1.1604, where I also recommend taking the profit. If bears do not show any activity in the area of 1.1814, and the Federal Reserve will wear the winning value, it is best to defer short positions to the updated high of 1.1864 or sell EUR/USD immediately on the rebound from the resistance of 1.1915 in anticipation of correction of 20-30 points inside a day. However, buyers will only be able to reach this level if Joe Biden wins the presidential election.

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Let me remind you that the COT report (Commitment of Traders) for October 27 recorded a reduction in both long and short positions. But despite this, buyers of risky assets believe in the continuation of the bull market and prefer to act cautiously. Thus, long non-profit positions fell from 229,878 to 217,443, while short non-profit positions also fell to 61,888 from 63,935. The total non-commercial net position fell to 155,555 from 165,943 a week earlier. However, bullish sentiment on the euro remains quite high in the medium term. The stronger the euro declines against the US dollar at the end of this year, the more attractive it will be for new investors, especially after the US presidential election, when additional pressure on the market on this issue will ease.

Signals of indicators:

Moving averages

Trading is above 30 and 50 daily moving averages, which indicates further growth of the euro.

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 pair declines, the average border of the indicator around 1.1740 will provide support.

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.
The material has been provided by InstaForex Company - www.instaforex.com

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