Hey traders! Let's break down what's happening with EUR/USD using the latest COT data, seasonality, and technical analysis. We’re seeing a mix of signals, with bearish short-term pressures but potential long-term opportunities. Let’s dive in! 🔍
📊 COT Report Breakdown (As of August 27, 2024) 📊
Commercials: Big increase in shorts (+47,576), signaling bearish pressure from the smart money 💼📉.
Large Speculators: They’ve added to their longs (+24,031) while cutting shorts (-12,790), showing a bullish bias from speculators 📈.
Total Market: Net short positions dominate, meaning overall market sentiment remains bearish for the time being.
👉 Conclusion: The commercials (hedgers) are strongly short, while large speculators are betting on a bullish move. This tug-of-war indicates potential short-term volatility.
📉 COT Index Insights 📉
Both the 6-month and 36-month COT indexes are in decline, signaling continued bearish pressure for the Euro against the USD. Historically, this kind of move suggests further downside in the near term.
📅 Seasonality of EUR/USD 📅
Looking at historical seasonality for EUR/USD:
September has historically been a weak month, with negative changes across 2, 5, and 10-year timeframes (-0.0205, -0.0079, -0.002 respectively) 📉.
October and December show improvement, which could provide long-term buying opportunities.
🔍 Technical Analysis (Daily Chart) 🔍
Current Price: Trading around $1.10432, approaching equilibrium. We see a weak high at $1.12000 that may act as a resistance zone 🚧.
Market Structure: The price is printing lower highs (LH) and equal highs (EQH), which hints at potential bearish continuation.
Supply & Demand: If the weak high holds, a pullback towards equilibrium ($1.09000) and discount ($1.06000) is expected before any potential bullish reversal.
💡 Trade Ideas 💡
📉 Short Setup (Short-Term Bearish):
Entry: Consider shorting between $1.10500 - $1.11000 if price rejects resistance.
Stop Loss: Above $1.12000.
Take Profit:
TP1: $1.09000 (equilibrium).
TP2: $1.06500 (discount zone).
📈 Long Setup (Long-Term Bullish):
Entry: Look for long positions around $1.06000, aligning with October seasonality and potential Euro recovery.
Stop Loss: Below $1.05000.
Take Profit:
TP1: $1.09500 (equilibrium retest).
TP2: $1.12000 (premium zone retest).
🚨 Key Levels to Watch 🚨
Resistance: $1.12000 (weak high).
Support: $1.09000 (equilibrium), $1.06000 (discount zone).
🔥 Final Thoughts 🔥
We’re seeing mixed signals in EUR/USD. While the short-term outlook is bearish, long-term bulls should watch for a pullback to the discount zone for better buying opportunities as we approach October and December.
Good luck and happy trading! 🚀💰
📊 COT Report Breakdown (As of August 27, 2024) 📊
Commercials: Big increase in shorts (+47,576), signaling bearish pressure from the smart money 💼📉.
Large Speculators: They’ve added to their longs (+24,031) while cutting shorts (-12,790), showing a bullish bias from speculators 📈.
Total Market: Net short positions dominate, meaning overall market sentiment remains bearish for the time being.
👉 Conclusion: The commercials (hedgers) are strongly short, while large speculators are betting on a bullish move. This tug-of-war indicates potential short-term volatility.
📉 COT Index Insights 📉
Both the 6-month and 36-month COT indexes are in decline, signaling continued bearish pressure for the Euro against the USD. Historically, this kind of move suggests further downside in the near term.
📅 Seasonality of EUR/USD 📅
Looking at historical seasonality for EUR/USD:
September has historically been a weak month, with negative changes across 2, 5, and 10-year timeframes (-0.0205, -0.0079, -0.002 respectively) 📉.
October and December show improvement, which could provide long-term buying opportunities.
🔍 Technical Analysis (Daily Chart) 🔍
Current Price: Trading around $1.10432, approaching equilibrium. We see a weak high at $1.12000 that may act as a resistance zone 🚧.
Market Structure: The price is printing lower highs (LH) and equal highs (EQH), which hints at potential bearish continuation.
Supply & Demand: If the weak high holds, a pullback towards equilibrium ($1.09000) and discount ($1.06000) is expected before any potential bullish reversal.
💡 Trade Ideas 💡
📉 Short Setup (Short-Term Bearish):
Entry: Consider shorting between $1.10500 - $1.11000 if price rejects resistance.
Stop Loss: Above $1.12000.
Take Profit:
TP1: $1.09000 (equilibrium).
TP2: $1.06500 (discount zone).
📈 Long Setup (Long-Term Bullish):
Entry: Look for long positions around $1.06000, aligning with October seasonality and potential Euro recovery.
Stop Loss: Below $1.05000.
Take Profit:
TP1: $1.09500 (equilibrium retest).
TP2: $1.12000 (premium zone retest).
🚨 Key Levels to Watch 🚨
Resistance: $1.12000 (weak high).
Support: $1.09000 (equilibrium), $1.06000 (discount zone).
🔥 Final Thoughts 🔥
We’re seeing mixed signals in EUR/USD. While the short-term outlook is bearish, long-term bulls should watch for a pullback to the discount zone for better buying opportunities as we approach October and December.
Good luck and happy trading! 🚀💰
Trade closed: target reached
trade closed
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.