In my morning forecast, I focused on the 1.0454 level and planned to make trading decisions based on it. Let's take a look at the 5-minute chart and see what happened. A breakout and retest of 1.0454 provided a good entry point for long positions, continuing the euro's rise, resulting in an upward movement of more than 50 points. The technical picture was revised for the second half of the day.

For Opening Long Positions on EUR/USD:

Strong PMI activity data, especially from Germany, strengthened the euro within the bullish market observed throughout the week. It remains to be seen whether similar U.S. data can support the dollar, which is quickly losing ground under Trump's lenient policies. Key reports today include the U.S. Manufacturing PMI, Services PMI, and Composite PMI. If U.S. data remains strong, the dollar could stage a significant recovery.

In the event of a decline, I plan to act near the nearest support at 1.0466, formed during the first half of the day. A false breakout at this level will provide a good entry point, aiming for a rise toward the resistance at 1.0511, formed during European trading. A breakout and retest of this range, coupled with weak U.S. data, will confirm the right entry point for buying, with the target of reaching 1.0539. The ultimate target will be the 1.0567 level, where I will fix profits.

If EUR/USD declines and there is no activity near 1.0466 in the second half of the day, selling pressure will return, allowing sellers to push toward 1.0414. I will consider buying the euro only after a false breakout at this level. Long positions will be opened immediately on a rebound from 1.0375, targeting an intraday correction of 30-35 points.

For Opening Short Positions on EUR/USD:

Sellers have shown relatively low activity, which is understandable as there are currently no strong reasons to sell the euro. However, everything could change quickly, especially if Trump takes a more serious stance on tariffs against the EU.

The primary task for bears in the second half of the day will be to protect the resistance at 1.0511. A false breakout there will confirm the presence of large sellers, offering an entry point for short positions targeting support at 1.0466. A breakout and consolidation below this range, followed by a retest from the bottom up, will offer another suitable selling opportunity, aiming for the 1.0414 low, where moving averages, supporting buyers, are located. The ultimate target will be 1.0375, where I will fix profits.

If EUR/USD moves higher in the second half of the day and sellers fail to act at 1.0511, I will postpone short positions until the next resistance at 1.0539. I will sell from there only after an unsuccessful consolidation. Immediate short positions on a rebound will be opened from 1.0567, targeting a downward correction of 30-35 points.

In the Commitment of Traders (COT) report for January 14, both long and short positions decreased. Amid growing uncertainty over the Federal Reserve's future policy, traders have reduced some positions. The inauguration of Donald Trump added pessimism, though the balance of power has not significantly changed. The report indicated that long non-commercial positions fell by 3,743 to 162,760, while short non-commercial positions dropped by 7,470 to 223,157. As a result, the gap between long and short positions widened by 3,096.

Indicator Signals

Moving Averages

The pair is trading above the 30- and 50-day moving averages, indicating a continuation of the euro's upward trend.

Note: The author considers moving averages on the hourly H1 chart, differing from the classic daily averages on the D1 chart.

Bollinger Bands

If the pair declines, the lower boundary of the indicator near 1.0395 will act as support.

Indicator Descriptions:

• Moving Average (MA): Identifies 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 using the futures market for speculative purposes.
• Long Non-commercial Positions: Total long open positions of non-commercial traders.
• Short Non-commercial Positions: Total short open positions of non-commercial traders.
• Total Non-commercial Net Position: The difference between short and long positions of non-commercial traders.