10.01.202513:04 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on January 10th (Analysis of Morning Trades). Traders Prepare for U.S. Labor Market Data

In my morning forecast, I highlighted the 1.0285 level and planned to make market entry decisions based on it. Let's look at the 5-minute chart and analyze what happened. A decline followed by a false breakout at this level led to a buying opportunity for the euro, resulting in a 30-point rise. The technical picture for the second half of the day remains unchanged.

For Opening Long Positions on EUR/USD:

The upcoming U.S. labor market statistics are critical and will likely determine the future trajectory of interest rates. Data on nonfarm payroll employment changes for December and the unemployment rate are expected. If the data surpass economists' forecasts, rate cuts in the U.S. may be off the table until late spring this year. Federal Reserve officials hinted at this yesterday. Conversely, if the data disappoint, the euro may regain lost ground against the dollar by the week's end.

Given the circumstances, I will act near the nearest support at 1.0285, which worked well during the first half of the previous day. A false breakout formation at this level will create a good buying opportunity, aiming for resistance at 1.0319. A breakout and subsequent retest of this range will confirm a correct entry for a further rise toward 1.0356. The ultimate target will be the 1.0397 high, where I will lock in profits.

In case of a decline in EUR/USD and a lack of activity near 1.0285 during the second half of the day, the pair may face increased pressure, and sellers could drive it down to 1.0257 and then to the monthly low of 1.0228. Only after a false breakout at this level will I consider buying the euro. Alternatively, long positions will be opened on a rebound from 1.0180, targeting a 30–35 point upward correction intraday.

For Opening Short Positions on EUR/USD:

Sellers paused after an unsuccessful attempt to break below 1.0285. Now it's better to wait for U.S. labor market data and the University of Michigan Consumer Sentiment Index before making decisions based solely on this information.

In case of a rise in the pair, defending the 1.0319 resistance will be sellers' priority. A false breakout formation there will provide a selling opportunity, targeting support at 1.0285. A breakout and consolidation below this range, followed by a retest from below, will offer another selling opportunity, aiming for the yearly low of 1.0257 and 1.0228. This move will also reestablish the bearish trend. The final target will be the 1.0180 level, where profits will be locked in.

If EUR/USD rises during the second half of the day and bears show no activity around 1.0319, where moving averages are located, short positions will be deferred until testing the next resistance at 1.0356. Sales will occur only after an unsuccessful consolidation attempt there. Short positions will also be considered on a rebound from 1.0397, aiming for a 30–35 point downward correction.

Commitments of Traders (COT) Report:

The December 31 COT report showed almost equal growth in long and short positions. Considering the Federal Reserve's monetary policy remained unchanged before the new year, attention is likely to shift toward Donald Trump's inauguration and his protectionist rhetoric. However, any statements from Federal Reserve representatives will still significantly influence the future course of the U.S. dollar.

The COT report indicated that long non-commercial positions increased by 9,335 to 168,806, while short non-commercial positions rose by 10,392 to 238,370. Consequently, the gap between long and short positions widened by 1,208.

Indicator Signals:

Moving Averages:

Trading is occurring slightly below the 30- and 50-day moving averages, indicating further declines for the pair.

Note: The periods and prices of the moving averages are considered on the H1 hourly chart and differ from the classic definitions of daily moving averages on the D1 daily chart.

Bollinger Bands:

The lower boundary of the indicator near 1.0285 will act as support in the event of a decline.

Indicator Descriptions:

• Moving Average (MA): Determines the current trend by smoothing volatility and noise. Period – 50 (yellow on the chart); Period – 30 (green on the chart).
• MACD Indicator (Moving Average Convergence/Divergence): Fast EMA – period 12, Slow EMA – period 26, SMA – period 9.
• Bollinger Bands: Period – 20.
• 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 positions held by non-commercial traders.
• Short non-commercial positions: Represent the total short open positions held by non-commercial traders.
• Non-commercial net position: The difference between non-commercial traders' short and long positions.