In my morning forecast, I focused on the 1.0347 level and planned to make trading decisions around it. Let's look at the 5-minute chart to see what happened. The rise and formation of a false breakout near 1.0347 provided a good entry point for selling the euro, leading to a modest 20-pip decline, after which pressure on the euro eased. Sales from 1.0315 resulted in losses. The technical outlook has been revised for the second half of the day.

To Open Long Positions on EUR/USD:

The fact that the euro rose without any solid data suggests that there are buyers in the market betting on Trump negotiating tariff relief with China. However, I believe this is unlikely. We have a lot of upcoming data, so expect volatility. It all starts with the Job Openings and Labor Turnover Survey (JOLTS) from the U.S. Bureau of Labor Statistics, ending with factory orders and the RCM/TIPP Economic Optimism Index.

Strong U.S. data will boost demand for the dollar, leading to a decline in EUR/USD, so I will be cautious with purchases. Only the formation of a false breakout near the new support at 1.0311 will create a good entry point for buying, similar to what was analyzed earlier. The target for growth will be the resistance at 1.0347, which the pair has failed to break through today.

A break and retest of this range will confirm a correct buy entry with an upward target of 1.0375. The ultimate target will be the 1.0404 high, where I will lock in profits. If EUR/USD declines and shows no activity around 1.0311—the midline of the sideways channel—the pair risks falling further. In that case, sellers may drag it down to 1.0279. Only after a false breakout at that level will I consider buying the euro. I plan to open long positions on a rebound from 1.0247, aiming for a 30-35 point intraday correction.

To Open Short Positions on EUR/USD:

Sellers have tried but have yet to achieve significant results. If U.S. data disappoints, the focus will shift to defending the strong resistance at 1.0347, which has been tested multiple times over the past day. Only the formation of a false breakout at 1.0347 will convince me of the presence of large sellers in the market, providing an entry point for short positions with a target of 1.0311. A break and consolidation below 1.0311, followed by a retest from below, will offer another suitable selling opportunity towards the new low at 1.0279, where the moving averages—currently favoring bulls—are located. The ultimate target will be 1.0247, where I will take profits.

If EUR/USD rises in the second half of the day and bears do not act near 1.0347, bulls may have a good chance to fully reverse the early-week sell-off. In that case, I will delay short positions until the next resistance at 1.0375. I will sell there only after a failed breakout. I plan to open short positions on a rebound from 1.0404, aiming for a 30-35 point downward correction.

COT Report (Commitment of Traders) - January 28:

The January 28 COT report showed a sharp reduction in both long and short positions. Buyers are becoming increasingly scarce, but sellers aren't increasing significantly either. Since this report does not account for market changes following Trump's tariffs on China, Mexico, and Canada, it's not highly relevant. Sellers far outnumber buyers, indicating a continued bearish market for the pair. The COT report showed that long non-commercial positions fell by 14,005 to 153,660, while short non-commercial positions decreased by 9,887 to 220,264. As a result, the gap between long and short positions widened by 6,888.

Indicator Signals

Moving Averages

The pair is trading above the 30- and 50-period moving averages, maintaining the potential for euro growth.

Note: The moving average periods and prices are based on the H1 hourly chart and may differ from the standard daily moving averages on the D1 chart.

Bollinger Bands

In case of a decline, the lower boundary of the indicator around 1.0279 will act as support.

Indicator Descriptions:

• Moving Average (MA): Determines the current trend by smoothing out volatility and noise.
  • 50-period MA marked in yellow on the chart.
  • 30-period MA marked in green on the chart.
• MACD (Moving Average Convergence/Divergence):
  • Fast EMA – 12-period
  • Slow EMA – 26-period
  • SMA – 9-period
• Bollinger Bands: Measures volatility and identifies overbought/oversold conditions.
  • 20-period
• Non-Commercial Traders: Speculators such as individual traders, hedge funds, and large institutions using the futures market for speculative purposes.
• Long Non-Commercial Positions: Total open long positions held by non-commercial traders.
• Short Non-Commercial Positions: Total open short positions held by non-commercial traders.
• Net Non-Commercial Position: The difference between non-commercial short and long positions.