Hi dear traders! On Tuesday, EUR/USD was extending its slide and settled below 1.1357, the 161.8% Fibonacci correction, at the end of the trading day. Thus, the currency pair again got stuck in the same trading range where it was oscillating for more than a month. EUR/USD managed to escape from the trading range a week ago. Now it could continue its decline towards the correctional level of 1.1250. The currency pair might spend some time trading sideways that obviously is not a welcome price move. The euro bulls were too weak to push the single currency up. The information background did not encourage traders to buy EUR/USD last week. On the contrary, nobody would have been surprised if the currency pair had closed in the red last week. So, it seems that EUR/USD is getting again into the sleeping mode. The policy meeting of the Federal Reserve that will take place next week matters a lot. This event alongside the ECB policy meeting could act as market catalysts so that the currency pair will be able to exit the trading range.

The ECB will be of little importance. Christine Lagarde has reiterated that the central bank is not going to introduce any changes in its monetary policy this year. Thus, traders pin hopes on the Federal Reserve. Currently, the dollar bulls are sluggish. That's why the US regulator has to express the hawkish rhetoric to convince traders to resume buying the US currency. Unless the bulls have an excuse for opening long positions on EUR/USD at the end of January, the currency pair might again get stuck sideways for a few more weeks. All in all, the question remains open whether EUR/USD will carry on its decline or settle again in a trading range.

Importantly, the economic calendar lacked any macroeconomic data on the EU and the US on Monday and Tuesday. The economic calendar is also empty today. No wonder, EUR/USD is again trapped inside the borders of 1.1232 to 1.1366. So, traders are anticipating the Fed's policy meeting. Let's hope that Jerome Powell and his colleagues will confirm their hawkish rhetoric. A week ago, almost all members of the rate-setting committee advocated for several rate hikes. Besides, it goes without saying that the bond-buying program will be terminated in full in March 2022.

On the 4-hour chart, EUR/USD reversed downwards in favor of the US dollar and settled below 1.1404 that matches 127.2% Fibonacci correction level. Hence, the price might continue its decline towards 1.1148 that is 161.8% Fibonacci correction. However, the 4-hour chart also reveals the clear-cut trading range where the price has already settled. Obviously, traders will have to make huge efforts to push the price out of the range.

Economic calendar for US and EU

US building permits are due at 13-30 UTC. On January 19, the economic calendar for the US and EU is literally empty. There is one report worthy of attention. By and large, the information background makes no impact on market sentiment today. Apart from economic data, there are no any significant events this week.

Outlook for EUR/USD and trading tips

I would recommend opening new short positions on EUR/USD in case the price closes exactly below the trend line on the 1-hour chart with the target at 1.1357. Meanwhile, we can keep existing short positions open with the target at 1.1250. Alternatively, we could buy the currency pair if the price closes above the upper border on any chart with any timeframe.