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21.01.202515:26 Forex Analysis & Reviews: EUR/USD: Trading Plan for the U.S. Session on January 21st (Review of Morning Trades)

Relevance up to 07:00 UTC--5

In my morning forecast, I focused on the level of 1.0356 and planned to make trading decisions from there. Let's look at the 5-minute chart and analyze what happened. A decline and the formation of a false breakout around 1.0356 provided a buying opportunity for the euro, but significant growth did not follow. The breakout and retest of 1.0356 with an entry point for a sale also failed to yield substantial profits, as trading remained centered around 1.0356. The technical outlook has been revised for the second half of the day.

Exchange Rates 21.01.2025 analysis

For Opening Long Positions on EUR/USD:

The drop in the ZEW economic sentiment index prevented euro buyers from establishing themselves at 1.0362, even though other reports were somewhat positive. Unfortunately, with no significant U.S. economic data today, don't be surprised if the euro continues to lose ground against the dollar, as the inauguration of U.S. President Donald Trump offers no favorable prospects for Europe. For this reason, I won't rush into purchases. A false breakout near the new support at 1.0328 will provide a good entry point for a rise toward resistance at 1.0362. A breakout and retest of this range would confirm a buying opportunity with a target of 1.0398. The furthest target is the 1.0433 level, where I'll take profits.

If EUR/USD declines further, which seems more likely, and no activity is seen around 1.0328, selling pressure on the pair will intensify. Sellers could push the pair toward 1.0298. Only after forming a false breakout there will I consider buying the euro. Direct long positions on a rebound are planned from 1.0268 with a 30-35 point intraday correction target.

For Opening Short Positions on EUR/USD:

Sellers are finally doing what they should have done yesterday, exerting notable pressure on the euro despite rumors that Trump does not plan to impose immediate tariffs on EU and Chinese goods. However, the situation could change quickly, so remain cautious and keep an eye on announcements from Trump's administration. If the euro rises, only a false breakout near 1.0362 will convince me of the presence of major players in the market, offering a short-entry point targeting 1.0328. A breakout and consolidation below this range, followed by a retest from below, would provide another short-selling opportunity targeting 1.0298. The furthest target would be the 1.0268 level, where I'll take profits.

If EUR/USD rises in the second half of the day and sellers don't appear around 1.0362, where moving averages currently favor sellers, I'll postpone short positions until the next resistance at 1.0398. There, I'll also consider shorting only after an unsuccessful breakout. If there's no downward movement there, I'll look for short positions on a rebound around 1.0433, aiming for a 30-35 point intraday correction.

Exchange Rates 21.01.2025 analysis

Commitments of Traders (COT) Report:

The COT report for January 14 showed a reduction in both short and long positions. With growing uncertainty surrounding the Federal Reserve's future policy, traders scaled back some positions. Trump's inauguration added pessimism, but the overall positioning hasn't changed significantly. The report showed that long non-commercial positions fell by 3,743 to 162,760, while short non-commercial positions declined by 7,470 to 223,157. The gap between longs and shorts increased by 3,096.

Exchange Rates 21.01.2025 analysis

Indicator Signals

Moving AveragesTrading is occurring near the 30- and 50-period moving averages, indicating further euro declines.

Note: The period and prices of moving averages are based on the hourly H1 chart and differ from traditional daily moving averages on the D1 chart.

Bollinger BandsIn case of a decline, the lower boundary of the indicator around 1.0354 will act as support.

Indicator Descriptions:

  • Moving Average (MA): Determines the current trend by smoothing volatility and noise. Period – 50 (yellow) and 30 (green).
  • MACD Indicator: Measures convergence/divergence of moving averages. Fast EMA – 12, Slow EMA – 26, SMA – 9.
  • Bollinger Bands: Identifies volatility and overbought/oversold levels. Period – 20.
  • Non-Commercial Traders: Speculators such as individual traders, hedge funds, and institutions trading futures for speculative purposes.
  • Long Non-Commercial Positions: Total long open positions by non-commercial traders.
  • Short Non-Commercial Positions: Total short open positions by non-commercial traders.
  • Net Non-Commercial Position: Difference between short and long non-commercial positions.

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