EUR/USD – 1H.
The EUR/USD pair continued to fall on January 15 and has already fallen to the corrective level of 127.2% (1.2072). The rebound of the pair from this level will work in favor of the European currency and the beginning of new growth in the direction of the downward trend line, which characterizes the current mood of traders as "bearish". Closing quotes above the trend line will also work in favor of the EU currency and further growth. Meanwhile, the whole world is following the events in Washington. Let me remind you that the day after tomorrow, the inauguration ceremony of the new US president Joe Biden will take place. In the District of Columbia (Washington), after the events of January 6, a state of emergency was declared. About 25 thousand National Guard soldiers patrol Washington, and the Congress building is surrounded by barbed wire, barricades on the streets. Authorities and the FBI fear more Protestant attacks on January 20. It is noteworthy that the US currency is quietly growing during all these busy days for the US. While earlier, in a quieter time for the US, it fell. Thus, it is now quite difficult to find a connection between the information background and how the euro/dollar pair moves. In Europe, nothing is interesting at all. In some countries, quarantine is again being strengthened, and in some, it is being extended, as the number of cases of coronavirus is growing again. But all traders understand that this is epidemiological and political news. We are more interested in the economy. But traders continue to pay very indirect attention to the economy, economic reports, and in general news and important messages.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes, despite the brewing bullish divergence, continue the process of falling in the direction of the corrective level of 161.8% (1.2027). The rebound of quotes from this level will work in favor of the EU currency and the beginning of growth in the direction of the Fibo level of 200.0% (1.2353). Closing quotes below the level of 161.8% will work in favor of a further fall in the direction of the next corrective level of 127.2% (1.1729).
EUR/USD - Daily.
On the daily chart, the EUR/USD pair quotes returned to the corrective level of 323.6% (1.2079). The pair's rebound from this level will work in favor of the EU currency and the resumption of growth in the direction of the Fibo level of 423.6% (1.2496). Closing below it will increase the chances of a further drop in quotes to the lower border of the upward trend corridor.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair performed a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On January 15, several reports were released in the United States. The most important one – for retail trade – showed a decrease in the reporting period. However, the US dollar continued the process of growth.
News calendar for the United States and the European Union:
On January 18, the calendars of the United States and the European Union are empty, so the information background will be absent today.
COT (Commitments of Traders) report:
The activity of major players at the beginning of 2021 remains rather weak. At the very least, they do not open a large number of new contracts, preferring a cautious strategy. Speculators, according to the latest COT report, opened 2,731 long contracts and closed 6,042 short contracts. Thus, their mood abruptly became more "bullish". Let me remind you that the COT report is released with a three-day delay, so it does not take into account the fall in quotes of recent days. The "Non-commercial" category of traders, therefore, again increases long contracts, that is, believes in the new growth of the European currency? On all charts, the pair may rebound from important levels in the near future. If they are met, then the upward trend can continue.
EUR/USD forecast and recommendations for traders:
On Monday, I recommend buying the euro currency with targets of 1.2182 and 1.2214 on the hourly chart, if the closing is made on the descending trend line. New sales of the pair can be opened with a target of 1.1997 when closing quotes under the level of 127.2% (1.2072) on the hourly chart.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
