empty
02.01.2025 01:21 PM
EUR/USD. January 2nd. Bears Face Strong Support Again

The EUR/USD pair on Tuesday returned to the 1.0420 level and rebounded from it. A reversal in favor of the US dollar occurred, and a new decline toward the 423.6% corrective level at 1.0320 began. However, the movement stopped for the third time near the 1.0346 level. I believe it is worth considering the support zone of 1.0320–1.0346 instead of just 1.0320. Breaking below this zone would open the path for further euro depreciation.

This image is no longer relevant

The wave situation remains clear. The last completed upward wave slightly broke the peak of the previous wave, while the last downward wave easily broke the previous low. Thus, a new bearish trend is forming, with no signs of completion. For these signs to appear, the euro must show a confident rise above the 1.0460 level.

There was no background information on Tuesday. Over the past few days, bears have shown a desire to resume the decline. They now need to break through the 1.0320–1.0346 zone mentioned earlier. When they might successfully break below this zone with a close beneath it remains unclear, as while the holidays are over, the festive mood lingers. The market might need some time to return to its usual rhythm. Today, several economic reports are expected from the EU, Germany, and the US, but they must support the dollar for bears to make another attempt to close below the 1.0320–1.0346 zone.

This image is no longer relevant

On the 4-hour chart, the pair has rebounded twice from the 127.2% corrective level at 1.0436. Thus, the decline could resume toward the Fibonacci 161.8% level at 1.0225. A consolidation above 1.0436 would open the potential for growth toward the upper boundary of the downward trend channel. There are no emerging divergences on any indicator. The trend channel does not provide reasons to expect significant euro growth.

Commitments of Traders (COT) Report:

This image is no longer relevant

Over the last reporting week, speculators closed 4,704 long positions and 14,382 short positions. The sentiment in the "Non-commercial" group remains bearish and is strengthening, indicating a further decline for the pair. The total number of long positions held by speculators is now 152,000, while short positions amount to 218,000.

For fourteen consecutive weeks, major players have been reducing their euro holdings, signaling a bearish trend. Occasionally, bulls dominate within individual weeks, but this is more of an exception. The primary factor driving the dollar's decline—expectations of a Federal Open Market Committee (FOMC) policy shift—has already been priced in. There are no longer reasons for massive dollar selling. While these factors may arise over time, the US dollar's growth remains more probable. Graphical analysis also supports the continuation of the long-term bearish trend. Thus, I expect a prolonged decline for the EUR/USD pair.

Economic Calendar for the US and Eurozone:

  • Eurozone: Germany Manufacturing PMI (08:55 UTC)
  • Eurozone: Eurozone Manufacturing PMI (09:00 UTC)
  • US: Initial Jobless Claims (13:30 UTC)
  • US: Manufacturing PMI (14:45 UTC)

The economic calendar for January 2nd contains four entries, none of which are highly significant. The influence of the information background on market sentiment today will likely be weak.

Forecast for EUR/USD and Trading Tips:

  • Selling the pair was possible after a rebound on the 4-hour chart from the 1.0436 level, targeting the 1.0320–1.0346 zone on the hourly chart. New sales are possible after a close below the 1.0320–1.0346 zone, targeting 1.0225.
  • Buying is possible after a rebound from the 1.0320–1.0346 zone, with targets at 1.0420 and 1.0460. However, buying cannot be a priority in a bearish trend.

Fibonacci Levels:

  • Built on 1.1003–1.1214 for the hourly chart.
  • Built on 1.0603–1.1214 for the 4-hour chart.
Samir Klishi,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

EUR/USD. July 4th. Bears continue to retreat from the market

On Thursday, the EUR/USD pair rebounded once again from the 1.1802 level and declined almost to the 127.2% Fibonacci retracement level at 1.1712. As of Friday morning, the pair

Samir Klishi 10:53 2025-07-04 UTC+2

Forex forecast 04/07/2025: EUR/USD, GBP/USD, USD/JPY, SP500 and Bitcoin

Useful links: My other articles are available in this section InstaForex course for beginners Popular Analytics Open trading account Important: The begginers in forex trading need to be very careful

Sebastian Seliga 10:51 2025-07-04 UTC+2

GBP/USD. July 4th. Independence Day

On the hourly chart, the GBP/USD pair on Thursday rebounded from the support zone of 1.3611–1.3633, reversed in favor of the pound, and now has every chance to continue rising

Samir Klishi 10:01 2025-07-04 UTC+2

EUR/USD Forecast for July 4, 2025

The main event of yesterday largely aligned with our forecasts — specifically, the anticipated "number play" occurred. But it was done very delicately, just enough to halt the growth

Laurie Bailey 06:01 2025-07-04 UTC+2

GBP/USD Forecast for July 4, 2025

On the daily chart, the British pound has consolidated below the MACD line. It had an excellent opportunity to also consolidate below the support level of 1.3635, but that attempt

Laurie Bailey 05:58 2025-07-04 UTC+2

Natural Gas Forecast for July 4, 2025

Natural Gas (NG) The daily balance indicator line decisively halted yesterday's price surge — Thursday ended with a decline of 2.63%. The drop, in turn, was held back

Laurie Bailey 05:53 2025-07-04 UTC+2

EUR/USD. July 3rd. The Most Important Day of the Week

On Wednesday, the EUR/USD pair rebounded from the 1.1802 level, reversed in favor of the U.S. dollar, and showed a slight decline. However, by Thursday morning, the pair had returned

Samir Klishi 12:10 2025-07-03 UTC+2

GBP/USD. The Sterling May Stop Receiving Support

As previously mentioned on multiple occasions, the strength of the major currencies traded against the U.S. dollar on the foreign exchange (Forex) market was based solely on the fundamental weakness

Pati Gani 11:27 2025-07-03 UTC+2

Forex forecast 03/07/2025: EUR/USD, USD/JPY, GBP/USD, SP500, Gold and Bitcoin

Useful links: My other articles are available in this section InstaForex course for beginners Popular Analytics Open trading account Important: The begginers in forex trading need to be very careful

Sebastian Seliga 10:57 2025-07-03 UTC+2

Forecast for GBP/USD on July 3, 2025

On the hourly chart, the GBP/USD pair on Wednesday rebounded from the 200.0% retracement level at 1.3749, reversed in favor of the U.S. dollar, and fell below the support zone

Samir Klishi 10:03 2025-07-03 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.