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EUR/USD. Smart Money. Bulls Continue to Play with Fire

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The EUR/USD pair has been declining for eight consecutive days. At the moment, quotes remain within "bullish" imbalance 9, which allows us to expect a reaction to this pattern eventually. Monday ended with the formation of a "Hammer" candlestick pattern, which is often a precursor to a reversal. It would have been better if this Hammer had simultaneously taken liquidity from a significant swing. However, there are no significant swings in the area of imbalance 9. Thus, I continue to wait for a bullish reaction to imbalance 9; however, invalidation of this pattern would force the conclusion that bearish ambitions are strong. This would not turn the trend bearish, but for some time the bears could seize the initiative. Therefore, only the bulls themselves can save the situation—and they need to do so as quickly as possible, this week. If the bulls manage to restore the euro's positions, then the reaction to imbalance 9 can be considered double.

Two weeks ago, there was a liquidity sweep of the swing from December 16, after which the decline of the euro began. The pair's decline may be completed this week, as bullish imbalance 9 is still a support zone for price. The news background for the dollar this week will be very challenging, and there are all the grounds to expect a retreat by the bears.

The chart picture continues to signal bullish dominance. The bullish trend remains in place, but at the moment traders need new signals. Such a signal can be formed only within imbalance 9. If bearish patterns appear or bullish ones are invalidated, the trading strategy will have to be adjusted. However, at the present time there are no grounds for this.

The news background on Wednesday was quite interesting. By now, two important reports have been released, but they did not show notable values. Within the next half hour to an hour, two more important reports will be published. The Eurozone Consumer Price Index for December matched market expectations at 2%, and the U.S. ADP employment change came in at +41 thousand, which also generally met forecasts. Thus, traders are now waiting for the ISM and JOLTS reports.

The bulls have had plenty of reasons for a new offensive for the past three months, and all of them remain relevant. These include the (in any case) dovish outlook for FOMC monetary policy, Donald Trump's overall policy (which has not changed recently), the U.S.–China confrontation (where only a temporary truce has been reached), protests by the American public against Trump under the "No Kings" banner, weakness in the labor market, the bleak outlook for the U.S. economy (recession), and the government shutdown (which lasted a month and a half but was clearly not priced in by traders). Thus, in my view, further growth of the pair will be entirely natural.

One should also not lose sight of Trump's trade war and his pressure on the FOMC. Recently, new tariffs have been introduced rarely, and Trump himself has stopped criticizing the Federal Reserve. But personally, I believe this is just another "temporary calm." In recent months, the FOMC has been easing monetary policy, which is why no new wave of criticism has come from Trump. However, this does not mean that these factors no longer create problems for the dollar.

I still do not believe in a bearish trend. The news background remains extremely difficult to interpret in favor of the dollar, so I do not even try to do so. The blue line shows the price level below which the bullish trend can be considered finished. The bears would need to push the price down by about 300 points to reach it, and I consider this task impossible under the current news background and circumstances. The nearest upward target for the euro remains the bearish imbalance zone of 1.1976–1.2092 on the weekly chart, which was formed back in June 2021.

News Calendar for the U.S. and the Eurozone:

• Eurozone – Unemployment Rate (10:00 UTC).
• U.S. – Initial Jobless Claims (13:30 UTC).

On January 8, the economic calendar contains only two entries, both of which are not particularly important. The impact of the news background on market sentiment on Thursday may be extremely weak or absent.

EUR/USD Forecast and Trading Advice:

In my view, the pair may be in the final stage of the bullish trend. Despite the fact that the news background remains on the bulls' side, bears have attacked more often in recent months. Still, I see no realistic reasons for the start of a bearish trend.

From imbalances 1, 2, 4, and 5, traders had opportunities to buy the euro. In all cases, we saw a certain rise. Opportunities to open new trend-following long positions also appeared when a reaction to bullish imbalance 3 was received, after the reaction to imbalance 8, and then after the bounce from imbalance 9. This week, a second reaction to bullish imbalance 9 may occur. The target for euro growth remains the 1.1976 level. New long trades are acceptable if a new bullish signal is formed. If not, the strategy of buying will have to be reconsidered.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD. Smart Money. The Pound Is in No Hurry to Resume Growth

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The GBP/USD pair has bounced off the "bullish" imbalance zone 12, which is a new buy signal. Despite the decline in the British pound's quotes last week, the bullish trend remains intact, and the bulls continue to dominate the market. Monday could have damaged the bullish chart picture, but it did not. Now all the trump cards are in the hands of buyers of the British pound, and all that remains for them is to hope for weak U.S. economic data on the labor market and unemployment this week. In my opinion, the probability of such an outcome is quite high. I would also note that there are currently no bearish signs or signals. There are no bearish patterns, nor are there any liquidity sweeps of bullish swings.

At the moment, "bullish" imbalance 12 remains the only viable pattern. If it turns out to be invalidated, this will not lead to an immediate cancellation of the bullish trend. It would only delay the next rise of the pound. Of course, traders are interested not in a pause but in a trend, but this week much will depend on U.S. economic data. Let me remind you that traders' main concerns are the U.S. labor market and the unemployment rate. The worse the reports on these indicators come out, the higher the chances of seeing a renewed offensive by bullish traders.

The current chart picture is as follows. The bullish trend in the pound may be considered complete, but the bullish trend in the euro is not. Thus, the European currency may pull the pound upward for as long as necessary—or vice versa. The bulls bounced off bullish imbalance 1, bullish imbalance 10, bullish imbalance 11 twice, and now also from imbalance 12, which is also bullish. Therefore, I still expect growth toward the 2025 highs—around the 1.3765 level.

On Wednesday, the news background is interesting and important, but so far traders have not received data that would force them to trade more actively. No important reports were released in the UK on Wednesday, and in the U.S. only the ADP report was published, which disappointed with its neutral reading. Thus, today traders' attention will be focused on the JOLTS report on job openings and the ISM Services PMI in the United States.

In the U.S., the overall news background remains such that, in the long term, nothing but a decline of the dollar can be expected. The situation in the U.S. remains quite difficult. The government shutdown lasted a month and a half, and Democrats and Republicans agreed on funding only until the end of January. There were no U.S. labor market statistics for a month and a half, and the latest data can hardly be considered positive for the dollar. The last three FOMC meetings ended with dovish decisions, and the latest labor market data allows for a fourth consecutive easing of monetary policy in January. In my opinion, the bulls have everything they need to continue a new offensive and return to the yearly highs.

A bearish trend requires a strong and stable positive news background for the dollar, which is hard to expect under Donald Trump. Moreover, the U.S. president himself does not need a strong dollar, as the trade balance would remain in deficit in that case. Therefore, I still do not believe in a bearish trend for the pound, despite the fairly strong decline in September and October. Too many risk factors continue to hang like dead weight on the dollar. What are the bears going to use to push the pound further down if a bearish trend is supposedly forming right now? If new bearish patterns appear, a potential decline of the pound sterling can be reconsidered.

News Calendar for the U.S. and the UK:

• U.S. – Initial Jobless Claims (13:30 UTC).

The economic events calendar for January 8 contains only one entry, which cannot be called important. The impact of the news background on market sentiment on Thursday will be absent.

GBP/USD Forecast and Trading Advice:

The outlook for the pound remains favorable for traders. Four bullish patterns have been worked out, signals have been formed, and traders can maintain buy positions. I see no informational grounds for a strong decline in the pound in the near future.

A resumption of the bullish trend could have been expected already from imbalance zone 1. At the moment, the pound has reacted to imbalance 1, imbalance 10, imbalance 11, and imbalance 12. As a potential growth target, I consider the 1.3725 level, but the pound may rise much higher. If bearish patterns form, the trading strategy may need to be revised, but so far nothing indicates a possible advance by the bears. Therefore, I recommend staying in buy positions.

The material has been provided by InstaForex Company - www.instaforex.com.

USD/JPY: Tips for Beginner Traders on January 7th (U.S. Session)

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Trade Analysis and Trading Tips for the Japanese Yen

The test of the 156.55 price level occurred at a moment when the MACD indicator had moved significantly above the zero line, which limited the pair's upward potential. The second test of 145.55, when the MACD was in overbought territory, led to the implementation of Scenario No. 2 for selling the dollar; however, the pair did not experience a major decline.

In the near term, the release of a number of important economic indicators is expected, including ADP private-sector employment data, the JOLTS report on job openings and labor turnover, and the ISM Services PMI. Market participants will carefully analyze every aspect of this data, trying to identify signs of a weakening labor market. If the ADP figure declines, this may indicate a further slowdown in hiring, which would force the Federal Reserve to continue cutting interest rates to support the labor market.

The ISM Services PMI will be another key indicator of economic health. Given the significant share of services in GDP, a decline in activity in this sector could signal a slowdown in overall economic growth.

As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy USD/JPY today upon reaching an entry point around 156.60 (thin green line on the chart), with a target of growth toward the 156.91 level (thicker green line on the chart). Around 156.91, I will exit long positions and open sell positions in the opposite direction (expecting a 30–35-point move in the opposite direction from the level). A continuation of the trend supports expectations for further growth in the pair.Important! Before buying, make sure that the MACD indicator is above the zero line and is just starting to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today in the case of two consecutive tests of the 156.43 price level while the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 156.60 and 156.91 can be expected.

Sell Signal

Scenario No. 1: I plan to sell USD/JPY today after a breakout of the 156.43 level (thin red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 156.15 level, where I will exit sell positions and immediately open buy positions in the opposite direction (expecting a 20–25-point move in the opposite direction from the level). Pressure on the pair may return today in the case of weak U.S. data.Important! Before selling, make sure that the MACD indicator is below the zero line and is just starting to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the case of two consecutive tests of the 156.60 price level while the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 156.43 and 156.15 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit orders can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit orders can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders should be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

15. GBP/USD: Tips for Beginner Traders on January 7th (U.S. Session)

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Trade Analysis and Trading Tips for the British Pound

The test of the 1.3490 price level occurred at a moment when the MACD indicator had moved well below the zero line, which limited the pair's downward potential. For this reason, I did not sell the pound. The second test of 1.3490 allowed Scenario No. 2 for a buy to be implemented, resulting in a small upward movement of the pair by 10 points.

The drop in the UK construction PMI to 40.1 creates many prerequisites for a slowdown in economic growth. Economists attribute this to a sharp decline in new construction orders caused by growing uncertainty about economic prospects and high interest rates, which discourage developers from starting new projects. The traders' reaction was quite predictable.

Ahead, we are expecting data on the change in employment from ADP, job openings and labor turnover from the Bureau of Labor Statistics, and the ISM Services PMI. ADP, as a barometer of private-sector employment, will provide a preliminary assessment of the overall picture expected in Friday's U.S. Department of Labor report. Another decline in the ADP figure may signal a slowdown in hiring, which in turn would put pressure on the U.S. Federal Reserve. JOLTS data, reflecting the level of job openings and labor turnover, will offer a deeper look at labor supply and demand dynamics. A high level of job openings combined with low turnover may indicate a resilient labor market, where companies are actively seeking employees and workers are not in a hurry to change jobs. The opposite situation, on the contrary, may indicate the onset of a recession, when companies cut vacancies and workers fear layoffs.

As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: I plan to buy the pound today upon reaching an entry point around 1.3513 (thin green line on the chart), with a target of growth toward the 1.3548 level (thicker green line on the chart). Around 1.3548, I will exit long positions and open sell positions in the opposite direction (expecting a 30–35-point move in the opposite direction from the level). Pound growth today can only be expected in the case of very weak U.S. data.Important! Before buying, make sure that the MACD indicator is above the zero line and is just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3486 price level while the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.3513 and 1.3548 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the pound today after an update of the 1.3486 level (thin red line on the chart), which will lead to a rapid decline in the pair. The key target for sellers will be the 1.3455 level, where I will exit sell positions and immediately open buy positions in the opposite direction (expecting a 20–25-point move in the opposite direction from the level). Pressure on the pound may return today in the case of strong U.S. data.Important! Before selling, make sure that the MACD indicator is below the zero line and is just starting to fall from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3513 price level while the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.3486 and 1.3455 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit orders can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit orders can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders must be extremely cautious when making market entry decisions. Ahead of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: Tips for Beginner Traders on January 7th (U.S. Session)

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Trade Review and Trading Advice for the European Currency

The test of the 1.1676 price level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.

The slowdown in the growth of the eurozone core Consumer Price Index to 2.3% is almost fully in line with the target levels set by the European Central Bank. This favorable trend creates the prerequisites for a potential adjustment of the current monetary policy if necessary. However, a balanced approach is essential now to support economic recovery and ensure price stability in the eurozone over the long term.

In the near term, data will be released from ADP on changes in private-sector employment, information on job openings and labor turnover from the Bureau of Labor Statistics, as well as the ISM Services PMI. Experts will pay particular attention to the ADP data in order to assess the scale of new job creation in the private sector following the sharp decline seen in November. The JOLTS report, published by the Bureau of Labor Statistics, will provide valuable insight into changes in labor demand and employees' willingness to change jobs. The ISM Services PMI will reflect sentiment in one of the key sectors of the U.S. economy. A reading above 50 indicates expansion, while a reading below 50 signals contraction. This indicator is highly important, as the services sector plays a central role in shaping GDP and employment in the country.

As for the intraday strategy, I will primarily rely on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, the euro can be bought if the price reaches the level around 1.1695 (green line on the chart), with a target of growth toward the 1.1715 level. At 1.1715, I plan to exit the market and also open short positions in the opposite direction, targeting a move of 30–35 points from the entry point. A strong rise in the euro can be expected only after weak U.S. data.Important! Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1682 level when the MACD indicator is in oversold territory. This would limit the pair's downward potential and lead to a reversal of the market upward. Growth toward the opposite levels of 1.1695 and 1.1715 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1682 level (red line on the chart). The target will be the 1.1662 level, where I intend to exit the market and immediately open buy positions in the opposite direction (targeting a 20–25 point move in the opposite direction from the level). Pressure on the pair may return at any moment.Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to move lower from it.

Scenario No. 2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1695 level when the MACD indicator is in overbought territory. This would limit the pair's upward potential and lead to a reversal of the market downward. A decline toward the opposite levels of 1.1682 and 1.1662 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price level where Take Profit can be set or profits can be locked in manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price level where Take Profit can be set or profits can be locked in manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner traders in the Forex market should be extremely cautious when making entry decisions. Ahead of the release of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD. Analysis and Forecast

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The EUR/USD exchange rate is trading near the round level of 1.1700, maintaining an overall bearish trend. New inflation data from the eurozone confirmed that price pressures remain moderate, leading to sideways movement of the pair near three-week lows as markets await the release of key U.S. employment data.

Data published by Eurostat on Wednesday showed that the Harmonised Index of Consumer Prices (HICP) in the eurozone fell to 2.0% year-on-year in December, in line with forecasts and down from 2.1% in November. Similarly, core HICP slowed to 2.3% year-on-year from 2.4%, outperforming expectations of 2.4%.

Nevertheless, the market remains calm despite rising geopolitical risks. U.S. intervention in Venezuela's domestic affairs has not led to significant political changes in the country, while President Donald Trump announced a $2 billion agreement on the export of Venezuelan oil to the United States.

Today, for better trading opportunities, attention should be paid to the release of U.S. job openings data (JOLTS) and the ADP employment report. These indicators will set the tone for the key U.S. labor market report (NFP, Non-Farm Payrolls) due on Friday. The data will help clarify the outlook for the Federal Reserve's monetary policy.

From a technical perspective, prices have shown resilience below the 100-day simple moving average (SMA). The round level of 1.1700 now acts as resistance, followed by 1.1725. It is also worth noting that the Relative Strength Index (RSI) on the daily chart has moved into negative territory, indicating that bulls are losing control of the situation. However, conclusions should not be rushed, as daily oscillators remain mixed.

The table below shows the percentage changes of the euro against major currencies today. The strongest movement of the euro was observed against the British pound.

The material has been provided by InstaForex Company - www.instaforex.com.

USD/JPY: Simple Trading Tips for Beginner Traders for January 7th. Review of Yesterday's Forex Trades

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Trade Review and Tips for Trading the Japanese Yen

The test of the 156.58 price level coincided with the moment when the MACD indicator was just beginning to move upward from the zero line, which confirmed a correct entry point for buying the dollar. As a result, the pair rose by 15 points.

Yesterday, the yen continued to trade within a sideways channel against the dollar after news that the U.S. services PMI came in below economists' forecasts. This created some uncertainty among investors about the strength of the U.S. economy, increasing expectations of further interest rate cuts by the Federal Reserve.

Today's data showing a decline in Japan's services PMI was also ignored by traders. At first glance, such a market reaction may raise questions, since macroeconomic indicators traditionally serve as a guide for investment decisions. However, there are explanations here as well. First, the decline in Japan's PMI may have been perceived as a temporary phenomenon that does not reflect long-term trends. The market tends to ignore one-off fluctuations and focus on more sustainable trends. In addition, the decline could have been linked to seasonal factors or technical adjustments. Second, traders' attention may have shifted to other aspects that are more important to them—namely, the future actions of the Bank of Japan regarding interest rate hikes. Third, it is also possible that market participants had already priced in the expected decline in the PMI.

As for the intraday strategy, I will mainly rely on the implementation of Scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: Today, I plan to buy USD/JPY when the price reaches the entry area around 156.55 (green line on the chart), targeting growth toward the 156.91 level (the thicker green line on the chart). Around 156.91, I plan to exit long positions and open short positions in the opposite direction, targeting a move of 30–35 points from that level. It is best to return to buying the pair on corrections and significant pullbacks in USD/JPY. Important: Before buying, make sure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if there are two consecutive tests of the 156.31 price level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 156.55 and 156.91 can be expected.

Sell Scenarios

Scenario No. 1: I plan to sell USD/JPY today only after a break below the 156.31 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 155.94 level, where I plan to exit short positions and immediately open long positions in the opposite direction, targeting a move of 20–25 points from that level. It is better to sell as high as possible. Important: Before selling, make sure that the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today if there are two consecutive tests of the 156.55 price level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 156.31 and 155.94 can be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought
• Thick green line – projected price where Take Profit orders can be placed or profits can be locked in manually, as further growth above this level is unlikely
• Thin red line – entry price at which the trading instrument can be sold
• Thick red line – projected price where Take Profit orders can be placed or profits can be locked in manually, as further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones

Important:Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly—especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

Forex forecast 07/01/2026: EUR/USD, USD/JPY, GBP/USD, SP500, Oil, Gold and Bitcoin

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We introduce you to the daily updated section of Forex analytics where you will find reviews from forex experts, up-to-date monitoring of financial information as well as online forecasts of exchange rates of the US dollar, euro, ruble, bitcoin, and other currencies for today, tomorrow and this trading week.

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 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.

#instaforex #analysis #sebastianseliga

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD: Simple Trading Tips for Beginner Traders for January 7th. Review of Yesterday's Forex Trades

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Trade Review and Tips for Trading the British Pound

The test of the 1.3511 price level occurred at the moment when the MACD indicator was just beginning to move downward from the zero line, which confirmed a correct entry point for selling the pound. As a result, the pair declined toward the target level of 1.3490.

The pound managed to hold its ground against the dollar after news that the U.S. services PMI came in below economists' expectations. This fact, which may seem contradictory from the standpoint of classical economic logic, nevertheless reflects the complex nature of current economic realities and market expectations. Contrary to expectations, the weakening of U.S. services-sector data did not lead to an immediate weakening of the dollar against the pound. There are several reasons for this. First, the British economy itself is facing serious challenges, including high inflation and recession risks. The declining attractiveness of the dollar is offset by similar problems in the UK. Second, the policy of the Bank of England plays an important role. Expectations of a further pause in the interest rate–cutting cycle in the UK, aimed at fighting inflation, are supporting the pound.

Today, traders' focus will shift to the UK construction PMI figures. This indicator, which reflects the pulse of construction activity, will provide valuable information about the state of the British economy amid ongoing uncertainty. Low PMI readings may signal a decline in demand for construction materials and services, affecting employment and investment in the sector. In turn, this could put pressure on the pound sterling and increase the risk of an economic slowdown. Conversely, high PMI readings would indicate sustained growth in the construction industry, which would be a positive signal for the UK economy as a whole. This would likely lead to a strengthening of the pound and increased investor confidence.

As for the intraday strategy, I will mainly rely on the implementation of Scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: Today, I plan to buy the pound when the price reaches the entry area around 1.3518 (green line on the chart), targeting growth toward the 1.3548 level (the thicker green line on the chart). Around 1.3548, I intend to exit long positions and open sell positions in the opposite direction, targeting a move of 30–35 points from that level. Strong pound growth today can be expected after positive data.Important: Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario No. 2: I also plan to buy the pound today if there are two consecutive tests of the 1.3490 price level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.3518 and 1.3548 can be expected.

Sell Scenarios

Scenario No. 1: I plan to sell the pound today after a break below the 1.3490 level (red line on the chart), which would lead to a rapid decline in the pair. The key target for sellers will be the 1.3462 level, where I plan to exit short positions and immediately open long positions in the opposite direction, targeting a move of 20–25 points from that level. Pound sellers may become active after weak data.Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2: I also plan to sell the pound today if there are two consecutive tests of the 1.3518 price level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.3490 and 1.3462 can be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought
• Thick green line – projected price where Take Profit orders can be placed or profits can be locked in manually, as further growth above this level is unlikely
• Thin red line – entry price at which the trading instrument can be sold
• Thick red line – projected price where Take Profit orders can be placed or profits can be locked in manually, as further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones

Important:

Beginner Forex traders should be extremely cautious when making market entry decisions. Before the release of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly—especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD: Simple Trading Tips for Beginner Traders for January 7th. Review of Yesterday's Forex Trades

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Trade Review and Tips for Trading the European Currency

The test of the 1.1704 price level occurred at the moment when the MACD indicator was just beginning to move downward from the zero line, which confirmed a correct entry point for selling the euro. As a result, the pair declined to the 1.1685 level.

Despite the fact that the U.S. services PMI showed a slight decline, the U.S. dollar nevertheless managed to strengthen its position against the euro.

Today, in the first half of the day, data on the change in the number of unemployed in Germany, the unemployment rate, as well as the eurozone Consumer Price Index for December are expected. These figures can significantly affect the balance of power in the market. Such data usually have a noticeable impact on traders, and today will be no exception. A low unemployment rate in Germany, the largest economy in Europe, would signal economic stability and have a positive effect on the euro. Conversely, an increase in the number of unemployed could trigger concerns about slowing economic growth and weaken the euro. As for the eurozone CPI, it is a key inflation indicator. A high CPI (which is unlikely) could push the European Central Bank to keep interest rates unchanged for longer. A low CPI, on the other hand, could raise concerns about deflation and prompt the ECB to introduce stimulus measures, putting pressure on the euro.

In addition to the figures themselves, how the markets interpret them will also be important. For example, if the CPI turns out slightly above expectations but signals emerge that inflation may slow in the future, the market reaction may be muted. Conversely, even a small deviation from forecasts accompanied by negative comments from policymakers could trigger significant market movements.

As for the intraday strategy, I will rely primarily on the implementation of scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: Today, buying the euro is possible if the price reaches the 1.1693 level (green line on the chart), with a target of growth toward 1.1715. At 1.1715, I plan to exit the market and also sell the euro in the opposite direction, targeting a move of 30–35 points from the entry level. A rise in the euro can be expected after strong data.Important: Before buying, make sure that the MACD indicator is above the zero line and just starting to rise from it.

Scenario No. 2: I also plan to buy the euro today if there are two consecutive tests of the 1.1676 price level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to a reversal upward. A rise toward the opposite levels of 1.1693 and 1.1715 can be expected.

Sell Scenarios

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1676 level (red line on the chart). The target will be 1.1653, where I intend to exit the market and immediately buy in the opposite direction, targeting a 20–25 point move upward from that level. Pressure on the pair may return today only after very weak economic data.Important: Before selling, make sure that the MACD indicator is below the zero line and just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today if there are two consecutive tests of the 1.1693 price level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.1676 and 1.1653 can be expected.

What's on the Chart

• Thin green line – entry price for buying the trading instrument
• Thick green line – projected price where Take Profit orders can be placed or profits can be manually locked in, as further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – projected price where Take Profit orders can be placed or profits can be manually locked in, as further decline below this level is unlikely
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones

Important:Beginner Forex traders should make entry decisions very cautiously. Before the release of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly—especially if you do not use proper money management and trade large volumes.

And remember: successful trading requires a clear trading plan, like the one presented above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD Forecast on January 7, 2026

.On Tuesday, the EUR/USD pair rebounded from the 23.6% Fibonacci retracement level at 1.1731, reversed in favor of the U.S. dollar, and fell to the 38.2% Fibonacci level at 1.1686. Today, a rebound from the 1.1686 level would favor the euro and lead to some growth toward 1.1731. A consolidation of the pair below 1.1686 would increase the likelihood of further decline toward the next retracement level, 50.0% at 1.1648.

The wave structure on the hourly chart remains straightforward. The most recent completed upward wave failed to break the previous peak, while the new downward wave broke the prior low. Thus, the trend has shifted to bearish. In my view, the decline will not be prolonged, but a break of the bearish trend is now required before expecting renewed euro growth. According to the current chart setup, such a break would occur above the resistance zone at 1.1795–1.1802 or after two consecutive bullish waves.

On Tuesday, nothing seemed to threaten the European currency. Traders had fully priced in the arrest of Maduro and Donald Trump's new geopolitical ambitions, but unexpectedly the dollar received support from Germany's inflation report. The slowdown in German inflation in December from 2.3% to 1.8% year-on-year, versus expectations of 2.0%, came as a complete surprise to traders. It is still too early to draw firm conclusions, but the probability of ECB monetary tightening in 2026 dropped sharply yesterday. If inflation continues to fall, tightening policy is not feasible, as higher rates would further restrain the consumer price index. It was precisely the ECB's high rates in 2023–2024 that allowed inflation to be reduced from the record post-pandemic levels. Thus, the euro's decline on Tuesday was justified, and today bears may continue their attacks if European inflation also shows a significant slowdown. However, it should not be forgotten that U.S. economic data will also be released today, which could give bulls additional strength.

On the 4-hour chart, the pair rebounded from the 1.1649–1.1680 support zone and reversed in favor of the euro. As a result, the growth process may continue toward the 0.0% retracement level at 1.1829. A consolidation below the 1.1649–1.1680 support area would increase the chances of a further decline toward the next Fibonacci level of 38.2% at 1.1538. No emerging divergences are observed on any indicator today.

Commitments of Traders (COT) Report:

During the latest reporting week, professional players opened 16,177 long positions and 1,189 short positions. Sentiment among the "non-commercial" group remains bullish thanks to Donald Trump and his policies, and continues to strengthen over time. The total number of long positions held by speculators now stands at 293,000, while short contracts amount to 133,000—giving bulls more than a twofold advantage.

For thirty-three consecutive weeks, large players were reducing short positions and increasing long ones. Then the shutdown began, and now we see the same picture again: professional traders continue to build long positions. Donald Trump's policies remain the most significant factor for traders, as they generate numerous problems that will have long-term, structural consequences for the U.S. economy—such as deterioration in the labor market. Traders fear a loss of Federal Reserve independence in 2026 under pressure from Trump, especially amid Jerome Powell's resignation expected in May.

Economic Calendar for the U.S. and the Eurozone:

• Eurozone – Change in German Retail Sales (07:00 UTC)
• Eurozone – German Unemployment Rate (08:55 UTC)
• Eurozone – Change in German Unemployment (08:55 UTC)
• Eurozone – Consumer Price Index (10:00 UTC)
• United States – ADP Employment Change (13:15 UTC)
• United States – ISM Services PMI (15:00 UTC)
• United States – JOLTS Job Openings (15:00 UTC)

On January 7, the economic calendar contains seven events, four of which are very important (U.S. data and European inflation). The impact of the news background on market sentiment on Wednesday may be strong, especially in the second half of the day.

EUR/USD Forecast and Trading Advice:

Selling the pair was possible after a rebound from the 1.1731 level on the hourly chart, with a target at 1.1686. The target was reached. Today, short positions can be opened after a close below 1.1686, with targets at 1.1648 and 1.1612. Buying opportunities will arise on a rebound from 1.1686 on the hourly chart, with targets at 1.1731 and 1.1805.

The Fibonacci grids are drawn from 1.1492 to 1.1805 on the hourly chart and from 1.1066 to 1.1829 on the 4-hour chart.

The material has been provided by InstaForex Company - www.instaforex.com.

Market eyes further gains amid micro?rotation

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People want to invest in the US equity market, but they are looking at other sector groups — those that offer relative value versus yesterday's leaders. As a result, while the Dow Jones managed to record a Santa Claus rally, the best since 2021-2022, the S&P 500 failed to do so for the third year running.

S&P 500 Santa Claus Rally Dynamics

Goldman Sachs calls 2026 a year of micro?rotation due to extreme concentration and the evolving trade in artificial intelligence technologies. According to the bank, the top 10 stocks accounted for 41% of market capitalization and 53% of the S&P 500's return in 2025. At the same time, the giants continue to move the market: NVIDIA's statement of more optimistic revenue forecasts allowed the broad index to hit new records. In October, the world's largest company projected revenue of about half a trillion dollars.

Despite the S&P 500 missing the Santa Claus rally, investors look to the future with optimism, especially at the start of the year. Since 1929, the US stock market has risen in January about 60% of the time.

At the same time, Goldman Sachs expects Europe to outshine the United States again next year. The bank forecasts a rally in the EuroStoxx 600 to 625, about 4% above current levels.

P/E Dynamics of European and US Equity Indices

A flow of capital from the more richly valued US equity market to Europe would be an obstacle to the S&P 500 reaching new record highs, especially against the backdrop of a potential slowdown in the US economy and a prolonged pause in the Fed's easing cycle. According to Richmond Fed President Thomas Barkin, current monetary policy is close to neutral — neither stimulating nor restraining the economy. That means it is still too early to return to cutting the federal funds rate.

However, investors remain optimistic about the outlook, particularly at the start of the year, when there is much talk of a transfer of capital from money market funds holding $7.6 trillion into US equities. If that happens, the seasonally strong January factor will be fully in play. The S&P 500's rally may continue, supported by low volatility in equity indices. The VIX fear index is trading at its lowest levels since late 2024.

It is quite likely the S&P 500 will move in a "two steps forward, one step back" mode in 2026. The external backdrop looks less favorable than before. Nevertheless, greed tends to visit the market more often than fear.

Technically, the daily chart shows that the broad index is regaining its upward trend. Long positions opened at 6,840 and above in the S&P 500 should be held and periodically increased. Target levels are 7,050 and 7,150. At the same time, the bulls' inability to push quotes above the resistance level of 6,980 would signal their weakness and activate the Three Indians pattern.

The material has been provided by InstaForex Company - www.instaforex.com.

Stock market on January 7: S&P 500 and NASDAQ extend gains

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Yesterday, stock indices closed with another advance. The S&P 500 rose by 0.62%, while the Nasdaq 100 added 0.65%. The Dow Jones Industrial Average strengthened by 0.99%.

The global equity markets index fell by 0.1% on Wednesday after four days of gains that had lifted it to a record high. Asian indices declined by 0.5% after a rally that delivered their best start to a year on record. Japanese indices slid by 1% after China imposed export restrictions. Against a backdrop of weak sentiment, futures on European and US stock indices showed modest declines after the opening bell. Treasury bonds gained slightly, with the yield on the benchmark 10?year note down one basis point to 4.16%.

Commodity prices also retreated: platinum fell by 7%, silver declined by 3.3%, and gold lost 1%. Oil dropped after US President Donald Trump said Venezuela would hand over up to 50 million barrels of oil to the US. Nickel gave back some gains after its largest rise in more than three years on the London exchange on Tuesday.

Tension in relations between China and Japan is now in focus. Despite optimism around artificial intelligence and expectations of Fed easing that pushed global equity markets to new highs, traders remain cautious. Economic reports from the US due this week will test the durability of this optimism.

Amova Asset Management said that the road ahead would be tougher than markets assumed, noting that strong geopolitical tensions worldwide were, in effect, being pushed to the background by the market.

As noted above, Beijing tightened controls on the export to Japan of goods that could potentially be used for military purposes, marking another escalation in diplomatic tensions between the two Asian countries over Taiwan. China made the announcement for both domestic and international audiences that it controls extraction rights for rare earths, and the fact that Beijing is signaling this to some extent before imposing actual sanctions means the market is unlikely to treat the move as a trigger for panic selling following the restrictions.

As for the technical outlook for the S&P 500, the immediate task for buyers today is to overcome the nearest resistance level of $6,946. Breaking above this level would signal further upside and open the path to $6,961. An equally important objective for bulls is to secure control above $6,975 to strengthen their positions. In case of a downside move amid waning risk appetite, buyers should assert themselves around $6,930. A break below this level could quickly push the index back to $6,914 and open the way to $6,896.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD Forecast on January 7, 2026

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On the hourly chart, the GBP/USD pair completed a reversal in favor of the U.S. dollar on Tuesday and consolidated below the 1.3526–1.3539 level. Thus, the decline may continue toward the 1.3437–1.3470 support area. A rebound from this zone or a consolidation above 1.3526–1.3539 would favor the British pound and a resumption of growth within the bullish trend toward the 127.2% Fibonacci level at 1.3595.

The wave structure remains bullish. The last completed downward wave did not break the previous low, while the new upward wave exceeded the previous peak. The news background for the pound has been weak in recent weeks, but the news flow in the United States also leaves much to be desired. At the start of the new year, bulls feel confident and are ignoring negative factors. A break of the bullish trend would occur below the 1.3403 level.

The news background on Tuesday was virtually absent, and the pound was trading more in line with the euro rather than on its own initiative. Today is a different story. The United States will release the second of three key blocks of economic statistics this week. The ADP report will show how private-sector employment in the U.S. changed in December. The JOLTS report will show how the number of job openings changed in November. And the ISM business activity index needs no further explanation. Let me remind you that the market continues to closely monitor U.S. labor market data, but the Nonfarm Payrolls and unemployment rate are considered more important. These reports represent the third important test for the dollar this week—on Friday. But Friday is still some way off; today's data will be enough to keep traders alert throughout the day. In my view, the pound's outlook remains positive, as there are still few signs of a recovery in the U.S. labor market.

On the 4-hour chart, the pair returned to the 1.3369–1.3435 support zone. A rebound from this area worked in favor of the pound and a resumption of growth toward the next 127.2% Fibonacci level at 1.3795. A consolidation below the 1.3369–1.3435 level would allow traders to expect a reversal in favor of the U.S. dollar and a decline toward the 1.3118–1.3140 support area. The ascending trend channel indicates the continuation of the bullish trend. No emerging divergences are observed today.

Commitments of Traders (COT) Report:

Sentiment among the "non-commercial" trader category became more bullish over the last reporting week. The number of long positions held by speculators increased by 1,572, while the number of short positions decreased by 5,727. The gap between long and short positions now stands at approximately 63,000 versus 105,000. Bears have dominated in recent months, but the pound appears to have exhausted its downward potential. At the same time, the situation with euro contracts is the exact opposite. I still do not believe in a bearish trend for the pound.

In my opinion, the pound still looks less "dangerous" than the dollar. In the short term, the U.S. currency may enjoy periodic demand in the market—but not in the long term. Donald Trump's policies have led to a sharp deterioration in the labor market, and the Federal Reserve is forced to ease monetary policy to curb rising unemployment and stimulate job creation. For 2026, the FOMC does not plan aggressive monetary easing, but at present no one can be sure that the Fed's stance will not shift to a more dovish one during the year.

Economic Calendar for the U.S. and the UK:

• United Kingdom – Construction PMI (09:30 UTC)
• United States – ADP Employment Change (13:15 UTC)
• United States – ISM Services PMI (15:00 UTC)
• United States – JOLTS Job Openings (15:00 UTC)

On January 7, the economic calendar contains four events, three of which are important. The impact of the news flow on market sentiment on Wednesday is expected in the second half of the day.

GBP/USD Forecast and Trading Advice:

Selling the pair was possible after a close below the 1.3526–1.3539 level on the hourly chart, with a target at 1.3470. These trades can be kept open today. Buying can be considered today either on a rebound from the 1.3437–1.3470 support zone on the hourly chart or after a close above the 1.3526–1.3539 level, with a target at 1.3595.

The material has been provided by InstaForex Company - www.instaforex.com.

CLARITY Bill nears finish line

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While Bitcoin struggles to overcome the $95,000 mark—repeatedly bouncing back after failed breakouts—Senator Tim Scott said the US Senate will put the CLARITY bill on the structure of the crypto market to a vote as early as next week.

The announcement injected fresh optimism into the crypto market. After months of uncertainty, investors sensed that a clear regulatory framework could attract institutional capital and lift BTC to new heights. That enthusiasm, however, should be tempered. The legislative process is full of nuances, and the passage of the bill would not automatically trigger an immediate capital influx. Much will depend on the specific provisions of CLARITY and how favourably they are received by large market participants.

The bill is intended to establish clear rules for the crypto industry in the United States. The House of Representatives approved the measure in July 2025. If the Senate passes the text without amendments, it would be sent directly to President Donald Trump for signature. No broad consensus has yet emerged. Democrats are pushing to require DeFi interfaces to comply with a range of rules that critics regard as excessive, and they seek to grant OFAC additional powers to counter illicit activity.

Only a day earlier, there were market rumours that the CLARITY vote might be delayed. Some experts now warn that passage of this key regulatory law could slip to 2027, with full implementation not occurring until 2029.

Trading recommendations:

According to the technical picture for Bitcoin, buyers are targeting a return to $93,200, which would open a direct path to $95,000 and then toward $97,300. The farther target is the peak near $99,400. A breakout of that level would signal attempts to restore a bullish market. If Bitcoin falls, I expect buyers around $91,300. A return below that area could quickly push BTC toward $89,600, with a further downside target near $87,400.

For Ethereum, clear consolidation above $3,280 opens a direct route to $3,372. The farther target is the peak near $3,474. Surpassing that level would strengthen bullish sentiment and renew buyer interest. If Ether declines, I expect buyers at $3,189. A drop below that area could swiftly send ETH toward $3,105, with a longer target near $2,997.

What we see on the chart:

- Red lines indicate support and resistance levels where either a price slowdown or active growth is expected;

- Green lines indicate the 50-day moving average;

- Blue lines indicate the 100-day moving average;

- Light green lines indicate the 200-day moving average.

Typically, a crossover or price test of these moving averages either halts market momentum or sets a new directional impulse.

The material has been provided by InstaForex Company - www.instaforex.com.

USD shrugs off fresh Fed signal

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The US dollar firmed slightly against the euro and the pound sterling on Wednesday, effectively ignoring remarks from Federal Reserve official Steven Miran. Miran said the central bank would likely need to cut interest rates by more than one percentage point in 2026, as current policy is restraining the economy.

Miran said on Tuesday that it was difficult to argue policy was neutral, calling it clearly restrictive and a drag on the economy, and adding that cuts of more than 100 basis points this year would be warranted.

His view raises questions about the balance between fighting inflation, supporting economic growth, and sustaining the labor market. Miran argued that, while restrictive policy aims to curb price pressures, it is also weighing on consumer credit, investment, and overall business sentiment.

Given these tensions, Miran's call for deeper rate cuts appears reasonable to some observers. Such easing could relieve pressure on the economy, bolster the labor market and demand, and create a more favorable business environment.

Last month, Fed officials cut rates for the third consecutive time but signaled that further reductions were not guaranteed in the near term. Policymakers remain divided over inflation and labor-market prospects, and their median projection in the latest forecasts includes only one rate cut in 2026.

Miran's comments followed other officials this week who suggested that policy may now be near neutral. Richmond Fed President Tom Barkin hinted on Tuesday that the current policy rate sits within the range of neutral estimates published in December. Minneapolis Fed President Neel Kashkari said on Monday that, in his view, policy is reasonably close to neutral given steady economic growth.

The Fed's policy rate currently stands at 3.50% to 3.75%. Among the 19 members of the Federal Open Market Committee, estimates of the neutral rate range from 2.6% to 3.9%.

The technical outlook for the EUR/USD pair suggests that buyers should consider reclaiming 1.1715. That would open the way to test 1.1740. From there, a move to 1.1765 would be possible, though doing so without support from major players could prove difficult. The extended target is the high at 1.1800. On a decline, look for significant buying interest near 1.1670. If no buyers appear there, it would be prudent to wait for a new low at 1.1640 or to open long positions from 1.1616.

As for the GBP/USD pair, its buyers should aim to capture the nearest resistance at 1.3500. That would allow a move toward 1.3530, above which a breakout would be challenging. The extended target is the area around 1.3560. If the pair falls, bears will attempt to seize control at 1.3470. A break of that range would deal a heavy blow to bullish positions and could push GBP/USD down to 1.3440, with scope to extend to 1.3415.

The material has been provided by InstaForex Company - www.instaforex.com.

Race for ECB vice presidency heats up

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As the euro gradually loses ground against the US dollar, Lithuania yesterday joined the contest for the vice-presidency of the European Central Bank. Former finance minister Rimantas Sadzius has been added to the list of candidates.

The finance ministry said in a statement published on Tuesday ahead of the January 9 application deadline that his long experience as finance minister, particularly during Lithuania's entry into the euro area in 2015, was invaluable and should be applied at the European level. Sadzius led the Baltic country's preparations for adopting the euro. Between terms as finance minister, he served on the European Court of Auditors before returning to Vilnius to head the ministry for a third time in 2024.

Luis de Guindos is due to leave his post at the end of May, upon completion of a non-renewable eight-year term. Croatia, Estonia, Finland, and Latvia have already declared their intent to nominate candidates, and Portugal may also enter the contest. In the past, the ECB vice-presidency has been held by representatives of France, Greece, and Portugal. Media reports say Croatia is backing Boris Vujcic, while Portugal has expressed readiness to support Mario Centeno.

Although the eurozone has included Eastern European countries for nearly two decades, and they now account for one-third of the 21-member currency union, a representative from the former communist bloc has never occupied a seat on the Executive Board.

Sadzius said that a strong euro was among the most important guarantees of both economic prosperity and European security, underscoring the ECB's significance, and he added that Lithuania had learned from other European countries and was now in a position to share its experience and expertise.

Eurozone finance ministers are expected to decide on de Guindos's successor at their meeting in Brussels on January 19. Terms for three other members of the Executive Board, including President Christine Lagarde, expire at the end of 2027.

The technical outlook for the EUR/USD pair suggests that buyers should consider reclaiming 1.1715. That would open the way to test 1.1740. From there, a move to 1.1765 would be possible, though doing so without support from major players could prove difficult. The extended target is the high at 1.1800. On a decline, look for significant buying interest near 1.1670. If no buyers appear there, it would be prudent to wait for a new low at 1.1640 or to open long positions from 1.1616.

As for the GBP/USD pair, its buyers should aim to capture the nearest resistance at 1.3500. That would allow a move toward 1.3530, above which a breakout would be challenging. The extended target is the area around 1.3560. If the pair falls, bears will attempt to seize control at 1.3470. A break of that range would deal a heavy blow to bullish positions and could push GBP/USD down to 1.3440, with scope to extend to 1.3415.

The material has been provided by InstaForex Company - www.instaforex.com.

The Pound Feels Confident Ahead of Key U.S. Data

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The pound's strong rally since November slowed on Tuesday after the release of the UK Services PMI for December. Business activity growth continued for the eighth consecutive month, but the pace of growth was weak and virtually unchanged from November (51.4 vs. 51.3), while the final reading came in below the preliminary estimate of 52.1. The sub-indices for new orders and sales were broadly unchanged, but the employment situation is deteriorating, with an overall reduction in staff levels observed for the fifteenth consecutive month.

PMI data, in general, do not carry much positive news for the pound, so it was quite natural for the market to react with some weakening of the currency. However, after some time the pound resumed attempts to rise. Possibly this is due to the report noting a sharp increase in costs, which led to the fastest growth in input prices since May; prices for final goods increased noticeably faster than in November. The overall picture therefore looks less attractive, especially from the perspective of the Bank of England: economic growth is weak, employment is declining, and prices are rising—that is, the threat of high inflation remains amid an unstable economy.

The Bank of England cut the rate in December to 3.75%, but the votes of the Committee members were split 4–5, indicating a complete lack of consensus. The threat of accelerating inflation adds arguments for the hawks, so the probability of a shift toward a more accommodative policy has decreased, which is a bullish factor for the pound.

Thus, as of Wednesday morning, the pound has fairly strong positions to continue rising, but not everything depends on it. The second half of the week risks being much more volatile, as later today the U.S. ADP private-sector employment report, the ISM Services PMI, and the JOLTs job openings report will be released. The state of the U.S. labor market raises many questions, as there are increasing signs of an economic slowdown, and the key December employment report expected on Friday could trigger a surge in activity, since the probability of deviations from forecasts in either direction remains high.

The calculated price remains above the long-term average, suggesting further appreciation of the pound.

In the previous review, we noted that the pound would aim for the 1.3620–1.3640 resistance zone; this forecast remains valid. The pound has started the year more confidently than the dollar and has reached a three-month high, returning to the levels it held before the important Fed meeting in September. The likelihood of a correction is minimal: there will be no major news from the UK until the end of the week, and the dynamics of GBP/USD will be entirely determined by news from the United States and geopolitical factors.

The material has been provided by InstaForex Company - www.instaforex.com.

Although there is potential for a limited correction, XPD/USD still has the opportunity to continue its strengthening.

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Palladium vs USD

Although a Bearish Divergence is detected between XPD/USD price movement and RSI(14), but with both EMAs in a Golden Cross and RSI in the Neutral-Bullish area, indicates only a limited correction and still has the potential for further strengthening.

Key Levels

1. Resistance. 2 : 1979.31

2. Resistance. 1 : 1922.29

3. Pivot : 1808.48

4. Support. 1 : 1751.46

5. Support. 2 : 1637.65

Tactical Scenario

Positive Reaction Zone: If the price breaks out and closes above 1808.48, the price may move up toward 1922.29.

Momentum Extension Bias: If 1922.29 is also broken, XPD/USD could test 1979.31.

Invalidation Level / Bias Revision

The upside bias weakens if XPD/USD declines to breaks and closes below 1637.65.

Technical Summary

EMA(50) : 1809.06

EMA(200): 1746.01

RSI(14) : 51.31 + Bearish Divergent

Economic News Release Agenda:

Tonight from the United States, the following important economic data will be released:

US - ADP Non-Farm Employment Change -20:15 WIB

US - ISM Services PMI - 22:00 WIB

US - JOLTS Job Openings - 22:00 WIB

US - Factory Orders m/m - 22:00 WIB

US - Crude Oil Inventories - 22:00 WIB

The material has been provided by InstaForex Company - www.instaforex.com.

Platinum still has the potential to continue its strengthening despite the possibility of a limited correction.

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Platinum

With the condition of both EMAs still being Golden Crosses, even though they are overshadowed by Bearish Divergence from RSI(14), #PLF still seems strong enough to continue its strengthening.

Key Levels

1. Resistance. 2 : 2605.7

2. Resistance. 1 : 2529.3

3. Pivot : 2384.7

4. Support. 1 : 2308.3

5. Support. 2 : 2163.7

Tactical Scenario

Positive Reaction Zone: If Platinum breaks out above 2384.7, the price may move toward 2529.3.

Momentum Extension Bias: If 2529.3 is broken to the upside, there is potential for #PLF to reach 2605.7.

Invalidation Level / Bias Revision

The upside bias weakens if Platinum breaks and closes below 2163.7.

Technical Summary

EMA(50) : 2373.5

EMA(200): 2264.9

RSI(14) : 45.66

Economic News Release Agenda:

Tonight from the United States, the following important economic data will be released:

US - ADP Non-Farm Employment Change -20:15 WIB

US - ISM Services PMI - 22:00 WIB

US - JOLTS Job Openings - 22:00 WIB

US - Factory Orders m/m - 22:00 WIB

US - Crude Oil Inventories - 22:00 WIB

The material has been provided by InstaForex Company - www.instaforex.com.

How to Trade the GBP/USD Currency Pair on January 7th? Simple Tips and Trade Analysis for Beginners.

.Review of Tuesday's Trades:GBP/USD 1H Chart

During Tuesday, the GBP/USD pair also showed a slight decline, for which the British currency had no strong reasons. Let us recall that the main factor behind the euro's decline can be considered the German inflation report, which increases the likelihood of a resumption of ECB monetary policy easing in 2026. However, confirmation or denial of this will be obtained today, when December inflation data for the European Union is published. In any case, German inflation has nothing to do with the British pound, so the market simply reacted according to the age-old correlation between the euro and the pound. If one currency falls, we often observe a decline in the other as well. From a technical point of view, an upward trend remains on the hourly timeframe, which is not observed for the EUR/USD pair. However, we do not believe that the euro's downward trend will last long, so we expect a reversal upward and a one-directional move of both the European and British currencies to the upside.

GBP/USD 5M Chart

On the 5-minute timeframe, two trading signals were formed on Tuesday. During the European trading session, the pair broke above the 1.3529–1.3543 level, and during the U.S. session it rebounded from the same area from below. Thus, beginner traders had grounds to open short positions. By the end of the day, the pair declined by about 20 points, but the sell trade could easily have been left open with the Stop Loss moved to breakeven.

How to Trade on Wednesday:

On the hourly timeframe, the GBP/USD pair has consolidated below the trend line; however, we see no real downward trend at the moment. There are no global reasons for medium-term growth in the dollar, so we expect movement only to the upside. Overall, we also expect a resumption of the global 2025 uptrend, which could bring the pair to the 1.4000 level within the next couple of months.

On Wednesday, beginner traders may remain in short positions after the two sell signals generated yesterday, targeting the 1.3437–1.3446 level. A new rebound from the 1.3529–1.3543 level would be a reason to open new shorts. A consolidation above the 1.3529–1.3543 level would make long positions relevant with a target of 1.3574–1.3590.

On the 5-minute timeframe, the following levels can currently be traded: 1.3043, 1.3096–1.3107, 1.3203–1.3212, 1.3259–1.3267, 1.3319–1.3331, 1.3437–1.3446, 1.3529–1.3543, 1.3574–1.3590, 1.3643–1.3652, 1.3682, 1.3763. On Wednesday, no notable events are scheduled in the United Kingdom, while in the United States three important reports will be released: the ADP labor market report, the JOLTs job openings report, and the ISM Services PMI.

Basic Rules of the Trading System:

1. The strength of a signal is measured by the time required for it to form (a rebound or a breakout of a level). The less time it takes, the stronger the signal.
2. If two or more trades were opened near a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair may generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the time period between the start of the European session and the middle of the U.S. session, after which all trades should be closed manually.
5. On the hourly timeframe, trades based on MACD signals should preferably be taken only when there is good volatility and a trend confirmed by a trend line or a trend channel.
6. If two levels are located too close to each other (from 5 to 20 points), they should be treated as a support or resistance zone.
7. After the price moves 20 points in the correct direction, the Stop Loss should be moved to breakeven.

What's on the Chart:

• Support and resistance price levels are levels that serve as targets when opening buy or sell positions. Take Profit levels can be placed near them.
• Red lines are channels or trend lines that show the current trend and indicate the preferred trading direction.
• The MACD indicator (14, 22, 3)—histogram and signal line—is an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can have a very strong impact on currency pair movements. Therefore, during their release, it is recommended to trade with maximum caution or to exit the market to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and proper money management are the keys to long-term success in trading.

The material has been provided by InstaForex Company - www.instaforex.com.

How to Trade the EUR/USD Currency Pair on January 7th? Simple Tips and Trade Analysis for Beginners.

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Review of Tuesday's Trades:EUR/USD 1H Chart

On Tuesday, the EUR/USD currency pair continued to trade lower, and there were reasons for that. Overall, yesterday traders could focus on just one report—the inflation report from Germany. We do not consider this report to be among the most important, since for the euro it is pan-European inflation that matters, not inflation in a single country of the bloc. Nevertheless, Germany's economy is the largest in the EU, so its data should not be completely ignored. The Consumer Price Index for December fell from 2.3% to 1.8%. Agree that a ?0.5% change is a very resonant and unexpected figure for many. What does inflation falling below 2% mean? Only that the ECB may resume a cycle of monetary policy easing. A cut in the key interest rate is a bearish factor for a currency, which is why we saw the euro fall yesterday. In addition, a downward trend remains on the hourly timeframe, so from a technical standpoint the decline was also natural. However, we do not expect it to last long. As early as today, labor market data from the United States will begin to arrive, which could have a very negative impact on the dollar.

EUR/USD 5M Chart

On the 5-minute timeframe, only one trading signal was formed on Tuesday. At the beginning of the European trading session, the price rebounded from the 1.1745–1.1755 level, which led to a 50-point decline during the day. Thus, even if beginner traders did not wait for the target area to be fully reached, they could still make a good profit by closing the trade manually on Tuesday evening.

How to Trade on Wednesday:

On the hourly timeframe, the trend has nevertheless changed to bearish, but likely not for long. The pair failed to overcome the 1.1800–1.1830 level, which is the upper boundary of the flat on the daily timeframe, so technically the decline is logical and may continue all the way to the 1.1400 level. The overall fundamental and macroeconomic background remains very weak for the U.S. dollar; therefore, we expect the pair's growth to resume in the medium term.

On Wednesday, beginner traders may trade from the 1.1655–1.1666 level. A rebound from this area will allow opening long positions with a target of 1.1745–1.1754. A consolidation below this area will make short positions relevant with a target of 1.1584–1.1591.

On the 5-minute timeframe, the following levels should be considered: 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527–1.1531, 1.1550, 1.1584–1.1591, 1.1655–1.1666, 1.1745–1.1754, 1.1808, 1.1851, 1.1908, 1.1970–1.1988. On Wednesday, the European Union is scheduled to publish an inflation report, to which the market may react if a resonant figure is released. In the United States, the ADP, JOLTs, and ISM Services PMI reports will be published. These data are also quite important.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time required for the signal to form (a rebound or a breakout of a level). The less time it takes, the stronger the signal.
2. If two or more trades were opened near a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair may generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the time period from the start of the European session until the middle of the U.S. session, after which all positions should be closed manually.
5. On the hourly timeframe, trades based on MACD signals should preferably be taken only when there is good volatility and a trend confirmed by a trend line or a trend channel.
6. If two levels are located too close to each other (from 5 to 20 pips), they should be considered as a support or resistance zone.
7. After the price moves 15 pips in the correct direction, the Stop Loss should be moved to breakeven.

What's on the Charts:

• Support and resistance price levels are levels that serve as targets when opening buy or sell positions. Take Profit levels can be placed near them.
• Red lines are channels or trend lines that show the current trend and indicate the preferred trading direction.
• The MACD indicator (14, 22, 3)—histogram and signal line—is an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can have a very strong impact on currency pair movements. Therefore, during their release, trading should be conducted with maximum caution or traders should exit the market to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and proper money management are the keys to success in trading over the long term.

The material has been provided by InstaForex Company - www.instaforex.com.

GBP/USD Overview on January 7, 2026

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On Tuesday, the GBP/USD currency pair continued to trade very calmly and near its local highs. GBP/USD traders paid no attention at all to Maduro's arrest. Essentially, they were right, as there is no real geopolitical conflict. And how Trump intends to govern another sovereign state remains unclear to many. As we have already said, it is one thing to carry out a military operation in another country, and quite another to establish full control over it. Venezuela is not an uninhabited wasteland, and virtually every resident there owns a weapon. Thus, from our point of view, Trump can negotiate with Rodriguez as much as he wants. The Venezuelan people will not approve such deals.

Therefore, the British pound against the dollar quite naturally did not react in any way to this event. A bit later on Monday, the ISM Manufacturing PMI was released, which showed what the market currently considers important. Trump may carry out military operations, establish peace, or stop wars, but all of his methods are not welcomed by traders and investors. The U.S. economy showed nearly record growth in the third quarter, but what is it supported by? Government spending? The American economy is not growing because every individual citizen is getting richer. Only wealthy Americans are getting richer in the U.S., while the poor continue to get poorer. The unemployment rate is rising, the labor market is in a knockout, business activity is declining, the Fed is forced to cut the key interest rate, and industrial production is not growing.

Thus, as before, we expect only growth in the GBP/USD pair. Both fundamental and technical factors support this view. Fundamentally, there is still no answer to the question of what could even drive the dollar higher. Only the factor of monetary policy easing by the Bank of England in 2026 could provide some support for the dollar. Previously, the dollar could count on market support amid geopolitical conflicts, but now central banks and large investors are trying to get rid of the U.S. currency (as clearly evidenced by COT reports). Thus, the dollar is no longer a "reserve currency."

From a technical perspective, the pair has consolidated above the Ichimoku cloud on the daily timeframe, and the downward correction that lasted four full months has most likely ended. Everything indicates that the 2025 uptrend will continue. On the weekly timeframe, it is also clearly visible that the global uptrend may have begun as early as 2022, when the pound fell almost to price parity with the dollar.

This week, traders will still need to review the JOLTs, ADP, ISM, Non-Farm Payrolls, University of Michigan Consumer Sentiment, and unemployment rate reports. Thus, the market may have plenty of reasons to continue selling the U.S. currency by the end of the week. Of course, one should not expect all U.S. reports to disappoint. However, the probability of weak readings for most of them is high. At the same time, no important events are scheduled in the United Kingdom this week.

The average volatility of the GBP/USD pair over the last five trading days is 90 points. For the pound/dollar pair, this value is considered "average." On Wednesday, January 7, we therefore expect movement within the range bounded by the levels of 1.3403 and 1.3583. The higher linear regression channel has turned upward, indicating a recovery of the trend. The CCI indicator has entered the oversold zone six times over the past months and has formed numerous bullish divergences, which constantly warn traders of the continuation of the upward trend.

Nearest support levels:

S1 – 1.3428S2 – 1.3306S3 – 1.3184

Nearest resistance levels:

R1 – 1.3550R2 – 1.3672R3 – 1.3794

Trading Recommendations:

The GBP/USD currency pair is attempting to resume the 2025 uptrend, and its long-term prospects remain unchanged. Donald Trump's policies will continue to put pressure on the U.S. economy, so we do not expect growth from the American currency. Thus, long positions with targets at 1.3583 and 1.3672 remain relevant in the near term while the price stays above the moving average. If the price is below the moving average line, small short positions with a target of 1.3403 may be considered on technical grounds. From time to time, the U.S. currency shows corrections (on a global scale), but for a trend-based strengthening it needs signs of the end of the trade war or other global, positive factors.

Explanations to the Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same direction, the trend is currently strong.
• The moving average line (settings: 20,0, smoothed) defines the short-term trend and the direction in which trading should currently be conducted.
• Murray levels are target levels for price movements and corrections.
• Volatility levels (red lines) represent the probable price channel in which the pair is likely to trade over the next 24 hours, based on current volatility indicators.
• The CCI indicator entering the oversold zone (below ?250) or the overbought zone (above +250) signals that a trend reversal in the opposite direction may be approaching.

The material has been provided by InstaForex Company - www.instaforex.com.

EUR/USD Overview on January 7, 2026

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During Tuesday, the EUR/USD currency pair corrected slightly downward and maintained a bearish bias. Overall, the dollar is holding on to positions it "earned through backbreaking labor." At the beginning of the week (or rather, over the weekend), the dollar frankly got lucky. The source of this luck was Donald Trump, who throughout 2025 did nothing but undermine the U.S. currency. This time, however, Trump decided to carry out a military operation in Venezuela aimed at capturing the country's president, Nicolas Maduro. This was successfully accomplished by U.S. forces in just a few hours. And the dollar, which still retains remnants of its former greatness, rose slightly out of old habit.

Trump himself stated that America wants to control Venezuela and is interested in Venezuelan oil. However, not in the sense of "taking everything for ourselves," but supposedly out of concern for the poor Venezuelan people. Naturally, no one in the market believed this interpretation, and many are now asking what the point of this operation really was.

Regardless of what Delcy Rodriguez, Donald Trump, and other officials may now claim, one simple truth should be understood: the Venezuelan people may not accept Trump's "generous" proposal. The leader of the White House decided to "lay his hand" on Venezuela's vast oil reserves, and the new president of the country, Delcy Rodriguez, is supposed to help him do so. First, it is completely unclear whether Rodriguez herself will agree to such a splendid scenario. If she does not, will Trump carry out another military operation—this time to abduct Rodriguez? Second, the new authorities in Caracas may agree to any deal with Trump, but that does not mean the Venezuelan people will support it.

For those who do not know, in Venezuela not every second resident has a weapon (as in the U.S.), but virtually every single one. If the decisions of the newly installed president do not suit the people, the country could be engulfed in a wave of bloodshed. A coup or revolution could begin. Who will put out this fire? We seriously doubt it will be Trump. At present, the entire operation in Venezuela does not even look like an attempt to seize Venezuelan oil or to stop the flow of drugs into the United States. The Americans captured Maduro—but what comes next? Did this automatically destroy all drug cartels in Venezuela? Or will the new authorities eliminate them within a couple of months? It should be remembered that in countries like Venezuela, drug cartels wield more political influence than the government itself. They possess money, weapons, and power. Therefore, in our view, nothing will change.

What Trump has gained, however, is the opportunity to "rattle weapons" in front of Colombia, Cuba, and even the European Union. The Venezuelan operation appears to have been needed so that all other countries with which Trump has disputes become more compliant. For example, Trump wants to gain control over Greenland. Perhaps after Venezuela, the passive European Union will simply hand it over to the United States—say, on a 50-year lease. We are confident that Trump will not start any wars, and the geopolitical conflict with Venezuela ended very quickly and, essentially, led to nothing.

The average volatility of the EUR/USD currency pair over the last five trading days as of January 7 is 53 points and is characterized as "medium-low." We expect the pair to move between the levels of 1.1635 and 1.1741 on Wednesday. The higher linear regression channel is directed upward, but in reality a flat market on the daily timeframe is still ongoing. The CCI indicator entered the overbought zone in early December, but we have already seen a small pullback. Last week, a bullish divergence was formed, indicating a resumption of the upward trend.

Nearest support levels:

S1 – 1.1658S2 – 1.1597S3 – 1.1536

Nearest resistance levels:

R1 – 1.1719R2 – 1.1780R3 – 1.1841

Trading Recommendations:

The EUR/USD pair remains below the moving average, but on all higher timeframes the upward trend persists, while on the daily timeframe a flat market has been ongoing for the sixth consecutive month. The global fundamental background still plays a huge role for the market, and it remains negative for the dollar. Over the past six months, the dollar has occasionally shown weak growth, but exclusively within a sideways channel. It has no fundamental basis for long-term strengthening. While the price remains below the moving average, small short positions may be considered on purely technical grounds with targets at 1.1658 and 1.1636. Above the moving average, long positions remain relevant with a target of 1.1830 (the upper boundary of the daily flat), which has effectively already been tested. Now the flat needs to end.

Explanations to the Illustrations:

• Linear regression channels help determine the current trend. If both are directed in the same direction, the trend is currently strong.
• The moving average line (settings: 20,0, smoothed) defines the short-term trend and the direction in which trading should currently be conducted.
• Murray levels are target levels for price movements and corrections.
• Volatility levels (red lines) represent the probable price channel in which the pair is likely to trade over the next 24 hours, based on current volatility indicators.
• The CCI indicator entering the oversold zone (below ?250) or the overbought zone (above +250) signals that a trend reversal in the opposite direction may be approaching.

The material has been provided by InstaForex Company - www.instaforex.com.

Trading Recommendations and Trade Analysis for GBP/USD on January 7th

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GBP/USD 5M Analysis

Unlike the EUR/USD pair, the GBP/USD currency pair is maintaining an upward trend. On Tuesday, the British pound traded lower, but there were no fundamental reasons for its decline. The euro could have reacted with a drop to the German inflation report, as a slowdown in inflation below 2% implies a possible resumption of monetary policy easing by the ECB. The British pound, however, had no such reports. Therefore, the only conclusion we can draw is that the euro pulled the pound down with it.

From a technical standpoint, the British pound does not have a trend line, but it does have two Ichimoku indicator lines acting as support for the current trend. As early as today, the Kijun-sen line may be tested. If the price holds above it, the pair's growth will resume. However, we would like to remind you that today the United States will release an important package of macroeconomic statistics, and on Friday a super-important package of macroeconomic data will be published. Thus, by the end of the week, we may see both strong growth and strong decline. Of course, we assume that the labor market will once again show poor results, but we cannot be certain of that. Moreover, it is not the results themselves that matter, but the ratio of the actual value to the forecast.

On the 5-minute timeframe, three trading signals were formed on Tuesday. During the Asian trading session, the pair consolidated above the 1.3533–1.3548 level, but this signal turned out to be false, and the price failed to continue rising. During the European session, the pair consolidated below this area, and during the U.S. session, it rebounded from below. Thus, two more sell signals were generated, duplicating each other, and they could be traded with a target at the critical line.

COT Report

COT reports on the British pound show that in recent years, the sentiment of commercial traders has been constantly changing. The red and blue lines representing the net positions of commercial and non-commercial traders constantly intersect and, in most cases, remain close to the zero level. At present, the lines are moving away from each other, but non-commercial traders are currently dominating with sell positions. Speculators are increasingly selling the pound, but as we have already said, it does not matter how low demand for the British currency is—demand for the U.S. dollar is often even lower.

The dollar continues to decline due to Donald Trump's policies, which is clearly visible on the weekly timeframe (illustration above). The trade war will continue in one form or another for a long time, and the Fed will in any case cut rates over the next 12 months. Demand for the dollar will decline one way or another. According to the latest COT report (dated December 23) on the British pound, the "Non-commercial" group opened 1.6 thousand buy positions and closed 5.7 thousand sell positions. Thus, the net position of non-commercial traders increased by 7.3 thousand over the week.

In 2025, the pound has risen quite strongly, but it should be understood that there is only one reason—Donald Trump's policies. As soon as this factor is neutralized, the dollar may start rising, but no one knows when that will happen.

GBP/USD 1H Analysis

On the hourly timeframe, the GBP/USD pair continues to form an upward trend despite breaking through the trend line. We believe that the growth of the pound in the medium term will continue regardless of the local macroeconomic and fundamental background. The trend for the pound remains bullish on almost all timeframes. The Senkou Span B line did not allow the price to move below it, signaling a resumption of the local upward trend.

For January 7, we highlight the following key levels: 1.3042–1.3050, 1.3096–1.3115, 1.3201–1.3212, 1.3307, 1.3369–1.3377, 1.3437, 1.3533–1.3548, 1.3615, 1.3681, 1.3763. The Senkou Span B (1.3421) and Kijun-sen (1.3483) lines may also serve as signal sources. It is recommended to move the Stop Loss to breakeven once the price moves 20 points in the correct direction. The Ichimoku indicator lines may shift during the day, which should be taken into account when identifying trading signals.

On Wednesday, no important publications or events are scheduled in the United Kingdom, while three reports of medium importance will be released in the United States. These include the ADP report, which shows changes in private-sector employment; the JOLTs report on the number of job openings; and the ISM Services PMI for the U.S.

Trading Recommendations:

Today, traders may consider sell positions if the price consolidates below the critical line, targeting the 1.3421–1.3437 level. Long positions will be relevant if the price rebounds from the Kijun-sen line or from the 1.3421–1.3437 level.

Explanations to the Illustrations:

• Support and resistance price levels – thick red lines near which price movement may end. They are not sources of trading signals.
• Kijun-sen and Senkou Span B lines – Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. They are strong levels.
• Extreme levels – thin red lines from which the price previously rebounded. They are sources of trading signals.
• Yellow lines – trend lines, trend channels, and any other technical patterns.
• Indicator 1 on the COT charts – the size of the net position of each trader category.

The material has been provided by InstaForex Company - www.instaforex.com.