14.01.202110:55 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on 01/14/2021

The markets are currently ignoring macroeconomic statistics. Yesterday, only the pound tried to make a reaction to the inflation data in the United States. However, it was not pleasing, which is not surprising at all. The Democratic Party continues to make sure that everyone is alert, as they arranged Donald's Trump impeachment. The Congress made an impeachment decision for the fourth time. But immediately after that, Republican Majority Leader in the Senate, Mitch McConnell, expressed doubts that the Senators would have time to essentially consider the issue in the remaining seven days, as in any case, Donald Trump is still ending his term on January 20. Moreover, he said that the Senate cannot proceed to this issue until Congress hands it over to the Senators. However, Nancy Pelosi, head of the Democratic majority in Congress, did not answer the question of when this issue will be officially sent to the Senate. It turns out that the Democrats just made another intrigue without any practical result.

Therefore, it is clear that as long as the Republicans control the Senate, Donald Trump cannot be officially impeached. However, the Democrats made everyone quite nervous, as they are willing to pursue their political opponents. This extremely scared investors. So far, their attempts have come to nothing, but the persistence they have raises concerns. Let's just say that their actions do not fit into the democratic values they declare, which could have very serious consequences even in the future. Nevertheless, their failure eventually led to the dollar's strengthening and this is especially evident in the single European currency.

Exchange Rates 14.01.2021 analysis

The price of the euro began to decline even before Congress made its decision and before the Senate announced its position on this issue. Apparently, large investors still retain their critical ability, even if things are panicky lately. At the same time, they completely ignored Europe's data on industrial production, whose rate of decline slowed down from -3.5% to -0.6% against the forecasted -3.2%. However, investors are more concerned with US political stability than European industry.

Industrial production (Europe):

Exchange Rates 14.01.2021 analysis

A little later, the pound slightly declined amid Congress' actual decision and then followed by sarcastic remarks from the Senate. It also almost coincided with the publication of US inflation data, which is pleasantly surprising. After all, inflation is expected to most likely remain unchanged, and only the boldest predicted growth is from 1.2% to 1.3%. However, this indicator rose from 1.2% to 1.4%, surprising everyone. Consequently, the yield on corporate bonds will increase soon, along with the company's revenues. In normal conditions, this data should have led to a more significant strengthening of the US dollar, but political risks continue to exert pressure.

Inflation (United States):

Exchange Rates 14.01.2021 analysis

In general, investors need to calm down and take a breath. This means that there will be no serious reaction to today's macroeconomic statistics, although the forecasts for applications for unemployment benefits are quite optimistic. Here, the number of initial requests is expected to rise by 3,000, but this is not very important. The number of repeated applications, in turn, should be lowered by 222,000. Most importantly, the number of repeated applications should decline below the 5 million mark for the first time since last year spring. Nevertheless, the US dollar's strengthening will be restrained, since investors need a break.

Number of re-claims for unemployment benefits (United States):

Exchange Rates 14.01.2021 analysis

The EUR/USD pair, after a short recovery, returned to the area of the base of the correction movement, where the trading week began. We can assume that the pivot point of 1.2130 will still serve the market and hold back sellers, which can lead to an amplitude of 1.2130/1.2275. The signal for the next round of the corrective move will be the price keeping below the level of 1.2130 in the four-hour time frame.

Exchange Rates 14.01.2021 analysis

The GBP/USD pair found a resistance in the area of the local high of the medium-term upward trend of 1.3690/1.3705 after a sharp growth. A stop occurred, which resulted in a pullback. We can assume that the existing stagnation can serve as an acceleration for the next movement, where the direction to the range of 1.3550-1.3500 will open if the price is kept below the level of 1.3600. Otherwise, the current amplitude can continue to the limits of 1.3610/1.3690.

Exchange Rates 14.01.2021 analysis

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Mark Bom,
Especialista em análise
do Grupo InstaForex © 2007-2021
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