According to the daily chart, EUR/USD is trading within a range formed since November 11. On Friday of last week, the euro reached the resistance zone of 1.1352 in light of the US nonfarm payrolls.
The disappointing US employment report released last week showed that the national economy created just 199,000 new jobs in December, worse than expected. This data weakened the dollar. However, investors had already discounted this data. Amid the Christmas and New Year's hoidays, a very bad report for December comes as no surprise.
As we can see in the chart above, the euro is consolidating for almost two months. So, we could expect to see a sharp breakout of any border of the trading range in the next few days.
If the euro breaks below the bottom of the range, we could expect a drop towards the psychological level of 1.10. On the contrary, with a break above the upper border of the range, EUR could reach again towards the 200 EMA on daily charts located at 1.1610.
In the meantime, our plan is to continue trading EUR/USD within the rectangle pattern and sell below the 2/8 Murray with targets at the 21 SMA at 1.1306. If this level is broken, we can sell targeting 0/8 Murray at 1.1230. The support of 1.1230 (0/8) could offer a technical bounce to buy that will be taken advantage by the bulls only if the price does not break this level.
The eagle indicator touched the oversold zone on November 23. Since then, the signal has been positive for the euro. This correction could be an accumulation for the pair to reach the zone of 95-point (overbought) again. Therefore, we believe that it will be a good opportunity to buy the euro around 1.1230 (0/8), only if it settles above this level.
Market report for today December 10 shows that there are 54.55% of operators who are buying EUR / USD. This is a bearish signal in the medium term. In the short term, we could expect the euro to rise to the zone of 1.1352 to resume its downtrend again. After that, EUR/USD will be able to break the support of 1.1200.
Support and Resistance Levels for January 10 - 11, 2022
Resistance (3) 1.1352
Resistance (2) 1.1336
Resistance (1) 1.1309
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Support (1) 1.1291
Support (2) 1.1258
Support (3) 1.1230
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Scenario
Timeframe 4-hours
Recommendation: sell Below
Entry Point 1.1352
Take Profit 1.1291 (1/8), 1.1230 (0/8)
Stop Loss 1.1387
Murray Levels 1.1352 (2/8), 1.1291 (1/8)
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Alternative scenario
Recommendation: sell if breaks
Entry Point 1.1291
Take Profit 1.1230 (0/8)
Stop Loss 1.1325
Murray Levels 1.1291 (1/8) 1.1230 (0/8) 1.1169 (-1/8)
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