FX.co ★ EUR/USD: plan for the American session on January 11 (analysis of morning deals)

To open long positions on EURUSD, you need to:

In the first half of the day, nothing interesting happened. I recommended paying attention to the level of 1.2174 and making decisions based on it. Let's take a look at the 5-minute chart and talk about what happened. In the morning forecast, I advised buying the euro after the formation of a false breakout in the support area of 1.2174, but this did not happen, since it did not reach the update of this area, and the pair spent half the day in a sideways channel. At the time of writing, the bears are trying to gain a foothold below 1.2174, which may lead to the formation of a sell signal.

Buyers of the euro need to take care to regain the level of 1.2174 as quickly as possible. The lack of important fundamental statistics at the beginning of the week can play into their hands. Only a test of the level of 1.2174 from top to bottom will lead to the formation of a signal to open new long positions to increase EUR/USD to the resistance area of 1.2224, where the moving averages are located, playing on the side of sellers. The longer-term target of buyers remains a maximum of 1.2281, where I recommend fixing the profits, but for such a large increase, you need a fairly good reason. If the bears continue to push the euro down, I recommend that you do not rush to buy, but wait for the support update at 1.2130. It is best to open long positions immediately on a rebound from the minimum of 1.2083 with the aim of an upward correction of 20-30 points within the day.

To open short positions on EURUSD, you need to:

Euro sellers now need to defend the resistance of 1.2174. Only a confident test of this area from top to bottom, which I have indicated on the chart, will lead to the formation of a signal to sell the euro. It is important to understand that after the first test of the level of 1.2174, a more active fall of the pair should begin with the main goal of reducing to the support of 1.2130, where buyers will try to return to the market. A breakout and consolidation below 1.2130 will open a direct road to the lows of 1.2083 and 1.2042, where I recommend fixing the profits. If there is no rapid downward movement after the update of 1.2174, it is best to abandon sales, as the market will return to the side channel again. If the bears miss the high of 1.2174 in the second half of the day, then it is best to return to short positions after updating the resistance of 1.2224 or sell EUR/USD immediately for a rebound from the resistance of 1.2881, counting on a downward correction of 20-30 points within the day.

Let me remind you that the COT report (Commitment of Traders) for January 5 recorded the growth of short positions and the growth of long positions. Buyers of risky assets continue to believe in a bullish trend, even despite the decline of the European currency at the beginning of this year, which will allow new major players to enter the market. News that vaccination against the first strain of coronavirus continues in Europe will also support euro buyers. Pressure on the euro will be exerted by isolation measures and the current quarantine in many European countries. Thus, long non-commercial positions rose from 222,443 to 224,832, while short non-commercial positions jumped to 81,841 from 78,541. Due to the larger increase in short positions, the total non-commercial net position decreased from 143. 902 to 142,991 weeks earlier. The insignificant change in the delta at the beginning of the year hardly indicates a change in the tactics of buyers of the European currency, who are counting on the resumption of euro growth after the lifting of quarantine measures in the EU countries.

Signals of indicators:

Moving averages

Trading is below 30 and 50 daily moving averages, which indicates a further decline in the euro in the short term.

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

A break of the lower limit of the indicator in the area of 1.2140 will lead to a new wave of decline in the euro. Growth will be limited by the upper level of the indicator in the area of 1.2240.

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.