EUR/USD Slow Trading Ahead of Eurozone PMI Data Release
Key Takeaways:
- Market Resilience: EUR/USD shows signs of a potential bullish reversal but faces resistance near 1.0910 and 1.0923.
- Bearish Targets: Bears eye 1.0743 as a key level, with Fibonacci extensions providing additional markers.
- Indicator Analysis: Mixed signals from technical indicators and moving averages necessitate careful monitoring for entry and exit points.
Morning Brief: Today's pivotal events encompass a wide spectrum, including January's PMI data from key economies and the Bank of Canada's interest rate decision. Additionally, the crude oil market will be impacted by EIA inventory data. The day concludes with significant quarterly reports from major companies like Tesla and IBM.
Calendar for Today's Session:
- 09:15 - France: PMI manufacturing index for January (Expected: 42.5, Previous: 42.1)
- 09:30 - Germany: PMI manufacturing index for January (Expected: 43.7, Previously: 43.3)
- 10:00 - Eurozone: PMI manufacturing index for January (Expected: 44.8, Previously: 44.4)
- 15:45 - USA: PMI manufacturing index for January (Expected: 47.9, Previously: 47.9)
- 16:30 - USA: EIA data on crude oil stock changes (Expected: -2.8 bbl, Previously: -2.49 bbl)
- 16:30 - Canada: Bank of Canada conference.
Results of Listed Companies:
- ASML Holding, Abbott Laboratories, AT&T, SAP, Tesla, and IBM.
Technical Market Outlook: The EUR/USD pair experienced a notable dip below the short-term trend line support at 1.0928, reaching a new low at 1.0822 before bouncing back. Bearish targets are eyed at 1.0743, the December 2023 low. The pair faces resistance at 1.0910 and 1.0923 (50 DEMA), a critical zone for bearish momentum. A sustainable break above this zone might tilt the short-term outlook towards bullishness. Bearish projected targets lie at 1.0837 (61% Fibonacci extension) and 1.0735 (100% Fibonacci extension). A Hammer candlestick pattern indicates emerging buyer interest, but a sustained move above moving averages is crucial for confirming a trend shift.
Trend Analysis (2nd Level Subtitle): The prevailing upward trend, marked by ascending trendlines, has been challenged as the price now lingers below both the 100-period EMA and the 50-period DEMA, signaling potential trend reversal or consolidation.
Candlestick Patterns (3rd Level Subtitle):
- Bullish Signal: "Hammer" pattern at support, hinting at a possible bullish reversal.
- Bearish Signal: "Bearish Engulfing" pattern at the uptrend's peak, indicating initial bearish shift.
Moving Averages (3rd Level Subtitle): The price is below the 100 EMA (1.0923) and the 50 DEMA (1.0883), potentially acting as dynamic resistance.
RSI (3rd Level Subtitle): The RSI stands at 53.64, a neutral indication, reflecting no extreme overbought or oversold conditions.
EUR/USD H1 Intraday Indicator Analysis:
- Buy Signals: 14 out of 22 technical indicators.
- Sell Signals: 3 indicators.
- Neutral: 5 indicators.
- Moving Averages: 10 indicate Buy, 8 indicate Sell.
Sentiment Scoreboard: Overall sentiment leans bullish (59% bulls vs. 41% bears), consistent with last week and the past three days.
Weekly Pivot Points (3rd Level Subtitle):
- WR3 - 1.09393
- WR2 - 1.09207
- WR1 - 1.09136
- Weekly Pivot - 1.09021
- WS1 - 1.08950
- WS2 - 1.08835
- WS3 - 1.08649
Conclusion: Practical Trading Insights
- Bullish Scenario: Look for confirmation of the Hammer pattern and a break above resistance and moving averages.
- Bearish Scenario: Monitor for a downward continuation, particularly below the Hammer's low. Be cautious of potential reversals and consider profit-taking or tighter stop losses near oversold RSI regions.
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Important Notice
The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.
Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.
