EUR/USD Daily Edge Report – January 02, 2026
📊 Pair: EUR/USD 📅 Date: January 02, 2026
Current Price and Trend Snapshot 🌍
- Current Level: ~1.1760 (thin post-holiday liquidity, minor upside from late-2025 consolidation).
- Recent Move: Strong rally through late 2025, up ~13-14% YTD — one of the best years in decades, driven by USD weakness post-Fed cuts.
- Key Levels: Support at 1.1700–1.1730; Resistance at 1.1800 (psychological/multi-year high) → 1.1840–1.1900.
- Overall Trend: Bullish on Daily/Weekly (higher highs/lows, above key MAs); HTF bias favors buyers amid policy divergence, but overbought near resistance risks shallow pullbacks.
Technical Analysis Overview 📈
- Major Levels: Trendline support ~1.1680–1.1700; Imbalance/FVG near 1.1750–1.1780.
- Potential Setups:
- Setup #1 candidate: Liquidity sweeps below recent lows → BOS higher → reclaim of 1.1800 for continuation.
- Coiled near resistance suggests Compression → Expansion breakout upside if vol returns.
- No extreme extension; watch mean reversion on failed breaks.
- Daily: Buy signals (MAs supportive); Weekly: Uptrend intact from 2025 lows, targeting 1.19–1.20+ on sustained momentum.
Retail Sentiment from X/Twitter & Social Media 🐦 Post-holiday thin; recent discussions dominated by signal spam/ads, minimal real trader chatter. Scattered calls mixed but low volume—no strong extremes. Contrarian: Quiet suggests retail not heavily positioned; potential edge on clean breaks.
Retail Sentiment Table
| Source | % Long | % Short | Extremes/Implications |
|---|---|---|---|
| Myfxbook | ~24% | ~76% | Extreme short → Strong contrarian bullish (crowd wrong at turns/extremes) |
| OANDA/IG/FXSSI | ~40-50% long (aggregated est.) | ~50-60% | Balanced to mildly short; fade extremes if structure aligns |
Professional/Institutional Sentiment 🏦
- Bloomberg/FXStreet/TradingView: Bullish into 2026; targets 1.20–1.25 on divergence.
- Bank Reports (JPM, Goldman, others): Moderately to strongly bullish (1.20-1.25 by mid/end-2026); Fed easing vs. ECB hold narrows yields favorably for euro. Implications: Specs building longs, supportive flows.
Most Recent COT Report 📊 Latest (mid-Dec 2025): Specs (non-commercial) increasing net-longs amid USD weakness; weekly changes show building bullish positions—implies sustained upside if specs continue adding.
Fundamental Drivers 💼
- Ongoing Themes: Policy divergence (Fed ~3.50-3.75% with 1-2 cuts priced 2026 vs. ECB hold ~2.00%); narrowing yield gap + eurozone resilience support euro.
- Upcoming Events (Jan 02): No high-impact red news—extended holiday thin liquidity; year-start repositioning possible. Expected reaction: Low vol, range-bound with risk-on tilt (bullish EUR).
Overall Market Bias and Trading Ideas ⚖️ Synthesize: Bullish HTF bias (structure + divergence + extreme retail shorts + institutional targets = contrarian long asymmetry). Fundamentals favor higher into 2026 (1.20+ plausible), but thin vol/resistance risks chop/pullbacks.
Potential Setups (H4/Daily Only):
- A-Setup (Liquidity Sweep → BOS → Reclaim): Dip/sweep to 1.1700–1.1730 → clean retest → long targeting 1.1840–1.1900 (RR 1:6+). Stop below low.
- Risk: Holiday fakeouts/low vol; no force—wait London/NY for clean zone.
- Fade retail shorts if technicals confirm; small risk on noise, perfection on liquidity events.
Stay calm—market delivers the edge. Asymmetry in patient bulls here.