08.01.202515:49 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on January 8th (Analysis of Morning Trades)

In my morning forecast, I focused on the 1.0341 level and planned to make trading decisions based on it. Let's look at the 5-minute chart and analyze what happened. A breakout and retest of this level provided a selling point for the euro, leading to a drop to the target mark of 1.0310. Purchases on a false breakout at 1.0276 yielded about 20 points of profit from the market.

For opening long positions on EUR/USD:

Pressure on risk assets increased during the first half of the day. Weak manufacturing reports from Germany and the risks of a trade war with the U.S. are the most pressing topics currently weighing on the euro. Ahead, we have ADP employment change reports and initial jobless claims numbers. Additionally, FOMC member Christopher Waller will speak, and the minutes of the December FOMC meeting will be published later in the day. Strong data could further pressure the euro, leading to a more significant sell-off. Therefore, I will only act around the nearest support level of 1.0276, which worked well in the first half of the day. Only a false breakout there, similar to the one described above, will provide a good entry point and a rise to the resistance level of 1.0319. A breakout and retest of this range will confirm the correct entry point for buying, with a target of 1.0356. The ultimate target will be the maximum of 1.0397, where I will take profits. In the scenario of EUR/USD declining and no activity around 1.0276 in the second half of the day, pressure on the pair will intensify, and sellers will manage to reach 1.0228, the monthly low. Only after forming a false breakout there will I consider buying the euro. Long positions will be opened immediately on a rebound from 1.0180 with a target of a 30–35 point intraday correction.

For opening short positions on EUR/USD:

Sellers likely control the market, but after such a large sell-off observed in the first half of the day, I would like to confirm that major players are ready to push the pair further down. This can be done after a correction and a false breakout at the nearest resistance level of 1.0319, aided by strong US data. This will also provide an entry point for short positions with a target at the 1.0276 support level, which has already been tested once today. Therefore, a breakout and consolidation below this range, as well as a retest from bottom to top, will provide another selling opportunity, targeting the yearly low of 1.0228. This will also restore the bearish trend. The ultimate target will be the level of 1.0180, where I will take profits. In the case of an upward move in EUR/USD in the second half of the day and no active bearish actions around 1.0319, I will postpone short positions until the next resistance level of 1.0356, where moving averages favor the bears. I will also sell there, but only after a failed consolidation. Short positions will be opened immediately on a rebound from 1.0397, targeting a 30–35 point intraday downward correction.

The COT report (Commitment of Traders) for December 31 showed an increase in both short and long positions in nearly equal proportions. Considering that the Federal Reserve's policy did not change before the new year, all attention will likely shift to Donald Trump's inauguration and his protectionist rhetoric. However, any statements from Federal Reserve representatives will also play a significant role in the future course of the US dollar, so they cannot be ignored. The COT report indicated that long non-commercial positions increased by 9,335 to 168,806, while short non-commercial positions increased by 10,392 to 238,370. As a result, the gap between long and short positions widened by 1,208.

Indicator Signals:

Moving Averages:Trading occurs below the 30 and 50-day moving averages, indicating a further decline in the pair.Note: The author considers moving averages on the H1 hourly chart, which differ from the classical daily moving averages on the D1 chart.

Bollinger Bands:In the case of a decline, the lower boundary of the indicator at around 1.0319 will act as support.

Indicator Descriptions:

• Moving Average (MA): Identifies the current trend by smoothing volatility and noise. Period – 50 (yellow on the chart) and 30 (green on the chart).
• MACD Indicator: Measures the convergence/divergence of moving averages. Fast EMA – period 12, Slow EMA – period 26, SMA – period 9.
• Bollinger Bands: Uses a 20-period setting.
• Non-commercial traders: Speculators like individual traders, hedge funds, and large institutions that use the futures market for speculative purposes and meet specific requirements.
• Long Non-commercial Positions: Represent the total long open position held by non-commercial traders.
• Short Non-commercial Positions: Represent the total short open position held by non-commercial traders.
• Non-commercial Net Position: The difference between short and long positions of non-commercial traders.