Daily
At yesterday's trading, the main currency pair of the Forex market returned to a downward trend and ended trading at 1.2156. As you remember, this scenario was supposed to be the main one, and it was based on technical nuances, namely, on the reversal model of the "Tombstone" candle analysis on weekly, as well as on additional details in the form of weekly and daily bearish divergences of the MACD indicator. At the same time, some analytical departments of major global commercial banks continue to argue that the growth of the single European currency against the US dollar will be short-lived and rather limited. If EUR/USD continues the upward trend, then its goal in the medium term will be the area of 1.2460-1.2520. In the most favorable scenario for the euro bulls, the pair may rise to the area of 1.2700. However, for this to happen, several factors in favor of the single European currency must coincide. This is the situation in the United States of America with the inauguration of President-elect Joe Biden or rather his first steps, and the fulfillment of the promise of large-scale support for the world's leading economy, as well as the situation with vaccination of the population against the COVID-19 pandemic, which is not going as smoothly as originally planned.
Also, the yield curve of European and American bonds, as well as further steps in the monetary policy of the ECB and the Fed, can have an impact on the price dynamics of the euro/dollar. It is quite possible that the fiscal stimulus in the US, after the initial euphoria, optimism, and risk appetite, will change in favor of strengthening the US currency. If we go back to the current trading week, then, as noted on Monday, the technical picture indicates a high probability of a decline in EUR/USD, which we are still observing. However, fundamental reports and speeches of high-ranking monetary officials can change the situation and break the technique, although this is unlikely. By the way, since we are talking about this, today at 08:30 (London time), there will be a speech by the Chairman of the US Federal Reserve Jerome Powell. I do not think that Powell will say something that will radically change the situation on the world trading platforms. Most likely, as before, the main focus in his speech will be on the degree of influence of COVID-19 on the world's leading economy. Some minor refinements may be added. From the macroeconomic events of today, I recommend paying attention to the American statistics on the number of initial applications for unemployment benefits, as well as the import price index.
If we return to the technical picture on the daily chart, then at the end of the article, the euro/dollar currency pair continues yesterday's downward trend and is trading near 1.2146. Here it is necessary to observe the behavior of the price relative to the strong technical level of 1.2150. If the bears on the pair succeed in a confident closing of trading below this mark, then the further targets of sellers will be 1.2100, 1.2080, 1.2060, and 1.2030. To change the current situation in their favor, bulls need to close today's trading not only above the significant level of 1.2200 but also the blue line of the Ichimoku Kijun indicator, which passes at 1.2204. Only under this condition will there be a chance of resuming the upward direction of the euro/dollar pair.
H4
This chart shows very clearly how strong support is in the area of 1.2135-1.2132. Players on the downside have already started testing the designated area for a breakout, and if it takes place, then on a rollback to a truly broken support zone, it is worth considering opening sell deals with targets of 1.2100, 1.2080, and 1.2060. If there are bullish reversal patterns of candlestick analysis in the selected area, we try to buy EUR/USD with the nearest target in the area of 1.2185-1.2205.
