The next trading week has ended on the foreign exchange market, and Christmas and New Year holidays are ahead, which will acquire a special flavor that was not typical before in the context of the COVID-19 pandemic. However, let's talk about everything in order. At the auction on December 14-18, the US dollar showed a decline against all major competitors, except the Canadian dollar. In particular, the US dollar fell by 1.12% against the single European currency and judging by the price charts of this instrument, this is far from the limit. In general, the mood on the global financial markets can be characterized as moderately positive, in which there is a tendency of investors to risk operations. However, the inability of the US Congress to agree on a new package of support measures against the COVID-19 pandemic for $ 900 billion, an open question regarding the conclusion of a deal to leave the UK from the European Union cool the appetite for risks, nevertheless, the demand for defensive assets, in particular for the US dollar has declined significantly recently.

Last week, it became known that French President Emmanuel Macron was among those infected with the coronavirus and was forced to leave for seven-day isolation, which the French leader holds at his residence in Versailles. Macron continues to remotely perform his duties, urging the French to strictly comply with the protection measures recommended by the authorities. In many European countries, restrictions are being tightened on the eve of the Christmas holidays. People are encouraged to stay at home as much as possible, and in the case of going to visit, be sure to use protective masks and avoid too crowded companies. But Christmas in Europe is one of the biggest holidays, and it is unlikely that everyone will stay at home. It is possible that after the Christmas celebrations, the situation with COVID-19 infection in Europe will worsen even more. In principle, the same can be assumed for the United States of America. In this regard, it cannot be ruled out that the beginning of 2021, due to a possible surge in coronavirus infection, will be extremely negative. On the other hand, the promises of the authorities of many countries to start mass vaccination of the population leave hope that the number of infected people will significantly decrease, and this also adds to optimism on global trading platforms. In general, in the author's personal opinion, the Christmas holidays will largely indicate the immediate dynamics of the COVID-19 pandemic.

Weekly

According to the results of the last five days of trading, the main currency pair of the Forex market showed quite impressive growth. Weekly highs were shown at 1.2272, and the session ended on December 14-18 at 1.2254. As previously suggested, in the event of a breakout of the resistance of sellers in the area of prices 1.2000-1.2010, the road opens to the February 2018 highs at 1.2555. Naturally, if this happens, it will not happen in one or two days, especially since no one has canceled corrective pullbacks in the market, and they are likely to take place. The bullish mood of the pair can also be judged by the fact that the market ignored the reversal model of the candle analysis "hanged", which is circled on the chart and was formed a week earlier. Given the fact that this model has been absorbed by strong growth, the pair is not going to change direction yet and will most likely continue to move in a northerly direction. In the case of the latest highs at 1.2272, we can expect the price to rise to the technical zone of 1.2300-1.2340, which is not easy to pass. If we define more distant growth targets, then this is the price area of 1.2380-1.2420.

Daily

On the last trading day of last week, the daily chart of EUR/USD also showed a reversal candle model "hanged", which is also called "gallows". In principle, this is a reason to conduct a corrective pullback, however, the market will take advantage of this opportunity or continue to move the price up. To break this pattern, euro bulls need to form a large bullish candle with a closing price above the highs of December 17-18 at 1.2272. The fact that this mark held back further strengthening of the quote for two consecutive trading days indicates its strength. However, nothing is impossible in the market, and given the rather strong upward trend in EUR/USD, it is quite possible to assume the scrapping of this model and the further rise of the quote to the prices indicated above. Based on all of the above, the main trading recommendation for the euro/dollar continues to be trend positions, that is, purchases. I consider it appropriate to consider opening long positions after corrective pullbacks to 1.2245, 1.2205, and 1.2180. If there are no such pullbacks and there is a true breakdown of the resistance of 1.2272, then on the rollback to this broken mark, you can also think about opening purchases. In tomorrow's article on EUR/USD, we will analyze the lower timeframes and, if necessary, adjust these trading recommendations.