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Forecast and trading signals for the EUR / USD pair for January 7. COT Commitment of Traders report. Analysis of transactions of the environment. Recommendations



DATE OF PUBLICATION: 2021-01-07 03: 04: 26EUR / USD 1H. On the hourly timeframe on January 6, the euro / dollar pair first made a new round of upward movement, then downward, dropping to the critical line of Kijun-sen. In general, nothing has changed over the past day. The resistance area 1.2295 – 1.2311, which until recently had resisted the quotes, yesterday let the pair go above and below itself without any problems. Thus, the only thing that can still be paid attention to now is the upward channel, global and long-term. But on the whole, the EUR / USD pair continues rather vague trading. Signals are often generated false or weak. Target levels are not always fulfilled. In general, the pair is moving up points by 20-30. Will renew the 2.5-year high and roll back down points by 50-60. Such movements are extremely difficult to work out, since it seems that the trend persists, but at the same time all movements are inaccurate, not pronounced. We have already written in our fundamental article that over the past two months the quotes of the EUR / USD pair went up by about 700 points. If we divide these 700 points (there were no strong corrections during this time) by 44 working days (approximately), then it turns out that the pair rose by an average of 16 points per day. Formally, there is a trend, but it is very inconvenient to work it out. EUR / USD 15M. On the 15-minute timeframe, both linear regression channels are directed upwards, but this does not add any clarity. As we said above, the price ignores strong lines, generates false signals, therefore trading at this time is associated with increased risks. COT report. During the last reporting week (December 22 – 28), the EUR / USD pair fell by 30 points. Minimal price changes, however, the euro / dollar pair has been moving steadily upward in recent weeks, but slowly. Thus, he hopes for no major changes in the mood of professional traders. On the eve of the New Year, a group of non-commercial traders closed 57 buy contracts and opened 1660 sell contracts. Thus, formally, their mood became more “bearish”, but in fact, the net position of this category of traders decreased by only 1600 contracts. For comparison, the total number of contracts for this group of traders is 340 thousand. Thus, the changes by 1.5 thousand are scanty. In general, the bullish sentiment remains. A few weeks ago, professional traders were actively reducing their net position and we concluded that a new downtrend was on the way. However, the demand for the US dollar in the foreign exchange market was so low that the downtrend for the euro currency did not begin, and non-commercial traders began to increase the number of Buy contracts again. For the last two weeks, no conclusions can be drawn at all about the change in their mood. Indicators also do not help much in this situation, since the changes are minimal. The green and red lines of the first indicator no longer move towards each other, but they are not removed either. The second indicator shows a decrease in the net position of non-commercial traders in the long term, but it did not significantly and stopped in the last month and a half.On Wednesday, January 6, the European Union published the PMI in the service sector for December, which very predictably dropped to in the end, 46.4. However, the euro was at that time in a new round of upward movement. The rollback began a little later. When the weak news from overseas began to arrive. For example, a report from the ADP on the change in the number of employees in the US private sector showed a decrease in December by 123 thousand, instead of the projected increase of 60 thousand. This is a very weak value of a fairly important indicator. The index of business activity in the US services sector also slightly decreased (55.3 – 54.8), but remained above the level of 50.0, so it could not have a special negative impact on the dollar. However, the US dollar has already risen in price at that time, so we can conclude that the macroeconomic statistics were once again ignored by market participants. On Thursday, January 7, the European Union will publish the consumer price index for December. According to experts’ forecasts, inflation will remain negative and amount to -0.4% in annual terms. In addition, the retail sales in the EU, which are of lesser importance, will be published. However, what difference does it make to what will be published today if the markets continue to stubbornly ignore any macroeconomic background? Based on the above, we have two trading ideas for January 7: 1) Buyers keep the initiative in their hands. They manage to keep the pair inside the ascending channel, so the chances of continuing the upward movement remain high. It is recommended to open new long positions in the event of a price rebound from the lower channel line, or from the Kijun-sen line (1.2282), or when overcoming the 1.2295 – 1.2311 area with a target of the resistance level 1.2365. Take Profit in this case can be up to 60 points. However, it should be remembered that the movement of the pair is now very non-standard and unstable. 2) Bears remain very weak at this time and cannot gain a foothold below the rising channel. Thus, it is recommended to open short positions if the bears manage to overcome the lower line of the ascending channel with the targets at support levels 1.2162 and 1.2107, not earlier. Take Profit in this case can range from 40 to 100 points. Burning forecast and trading signals for the GBP / USD pair. We also recommend studying the fundamental background in these articles: EUR / USD pair review. Jan. 7. Trump’s last battle: what legacy will the current US president leave to the Republicans? GBP / USD pair overview. Jan. 7. The paradoxical US dollar continues to trade by its own rules. Coronavirus anti-records in the UK. Explanations to the illustrations: Price levels of support and resistance (resistance / support) – levels that are targets when opening buy or sell. You can place Take Profit levels around them. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines transferred to the 1-hour timeframe from the 4-hour timeframe. Support and resistance areas are areas from which the price has repeatedly bounced. Yellow lines are trend lines, trend lines. channels and any other technical patterns. Indicator 1 on the COT charts – the size of the net position of each category of traders. Indicator 2 on the COT charts – the size of the net position for the “Non-commercial” group. Material provided by InstaForex – www.instaforex.com Source – InstaForex

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