In my morning forecast, I highlighted the 1.0417 level and planned to base trading decisions on it. Let's look at the 5-minute chart and break down what happened. A rise and the formation of a false breakout around 1.0417 led to a sell signal for the euro. However, a significant decline in the pair has not materialized yet. The technical outlook for the second half of the day remains unchanged.

To Open Long Positions on EUR/USD:

The euro has slightly recovered, but a larger upward movement has not occurred, indicating caution among traders ahead of US President Donald Trump's speech today. His remarks will likely focus on the measures his administration intends to implement, which could lead to increased market volatility. If clarity on trade tariffs emerges, pressure on risk assets may return, which could weigh on the euro.

Additionally, US initial jobless claims data is due today. Strong figures reflecting a decline in claims could bolster the dollar.I will look to buy the euro after a decline and the formation of a false breakout near the 1.0381 support level, which was not reached during the first half of the day. This will create a good entry point for a rise toward the 1.0417 resistance level, which the pair has struggled to break. A breakout and retest of this range, combined with weak US data, will confirm a correct buy entry, targeting 1.0454. The final target will be 1.0496, where I will take profits.

If the EUR/USD declines and there is no activity around 1.0381 in the second half of the day, the pair will face renewed pressure, and sellers may push it down to 1.0347. I will only consider buying the euro after a false breakout forms at this level. Direct long positions on a rebound will be possible from 1.0311, targeting a correction of 30-35 points within the day.

To Open Short Positions on EUR/USD:

Sellers were active at 1.0417, but this was only sufficient to defend the level, with no significant follow-through on extending the downward correction.The primary target for bears in the second half of the day is to defend the 1.0417 resistance level. A false breakout at this level, similar to what I described earlier, will confirm the presence of major players in the market and provide a sell entry point, aiming for a decline toward the 1.0381 support level. A breakout and consolidation below this range, followed by a retest from below, will provide another sell opportunity, targeting the 1.0347 low. The final target will be the 1.0311 level, where I will take profits.

If EUR/USD rises in the second half of the day and sellers show no activity near 1.0417, where the moving averages are also aligned in favor of the bears, I will postpone short positions until the next resistance at 1.0454—the last line of defense for the bears. I will sell there only after a failed consolidation. Direct short positions on a rebound will be possible from 1.0496, targeting a correction of 30-35 points.

The COT report (Commitment of Traders) for January 14 showed reductions in both long and short positions. Amid growing uncertainty about the Federal Reserve's future policy, traders trimmed some positions. Trump's inauguration added pessimism, but the overall balance of power has not changed significantly. The COT report indicated that long non-profit positions decreased by 3,743 to 162,760, while short non-profit positions fell by 7,470 to 223,157. As a result, the gap between long and short positions increased by 3,096.

Indicators Overview:

Moving Averages

Trading is slightly below the 30- and 50-day moving averages, indicating market uncertainty.

Bollinger BandsIn case of a decline, the lower boundary of the indicator near 1.0395 will act as support.

Indicator Descriptions:

• Moving average (a moving average that determines the current trend by smoothing out volatility and noise). The period is 50. It is marked in yellow on the graph.;

• Moving average (a moving average that determines the current trend by smoothing out volatility and noise). The period is 30. It is marked in green on the graph.;

• MACD indicator (Moving Average Convergence/Divergence – convergence/divergence of moving averages) Fast EMA – period 12. Slow EMA – period 26. SMA – period 9;

• 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;

• Non-commercial short positions represent the total short open position of non-commercial traders;

• The total non-commercial net position is the difference between the short and long positions of non-commercial traders.