EUR/USD – 1H.
On January 20, the EUR/USD pair fell almost to the corrective level of 127.2% (1.2072), after which it turned in favor of the EU currency and resumed the growth process. Fixing the pair's rate above the Fibo level of 100.0% (1.2131) will work in favor of continuing growth towards the next corrective level of 76.4% (1.2182). Meanwhile, yesterday, the event that everyone has been waiting for a very long time took place. Joe Biden's inauguration was a no-brainer. There were no signs of a repeat on January 6. Biden took the oath of office, delivered the opening speech and immediately went to the White House, where he immediately began to cancel the decrees of his predecessor, Donald Trump. In the oval office on January 20, Biden signed documents on the return of the US to the World Health Organization, the Paris Climate Agreement, as well as documents ordering a stop to the construction of the wall on the border with Mexico. Joe Biden has already lifted the travel ban for citizens from a number of Muslim countries and issued a decree on the mandatory wearing of masks for the next 100 days. Also on this day, the heads of the Ministry of Defense, the State Department, the Ministry of Justice and the Ministry of Finance were appointed. Thus, the new president did not sway and immediately got to work. Today the main event will be the ECB meeting, after which the results will be summed up, a report on monetary policy will be made and a press conference will be held. Traders do not expect any changes in monetary policy. Christine Lagarde has repeatedly drawn attention to the high rate of the euro currency, but so far it is unlikely that the ECB will take any measures in this regard.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes, after the formation of a bullish divergence at the MACD indicator, continue the growth process in the direction of the corrective level of 200.0% (1.2353). Closing quotes under the Fibo level of 161.8% will work in favor of the US dollar and resume falling towards the next corrective level of 127.2% (1.1729). So far, the two lower charts indicate a very likely growth of the euro currency.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair performed a fall to the corrective level of 323.6% (1.2079) and a rebound from it. Thus, the growth of the European currency can now resume in the direction of the corrective level of 423.6% (1.2496). The third chart also indicates a very likely growth of the pair.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair has made a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term. The fourth graph.
Overview of fundamentals:
On January 20, there was no news in the United States, and the European Union released a report on inflation, which surprised no one and disappointed everyone. EU inflation remained at a negative level of -0.3% y/y.
News calendar for the United States and the European Union:
EU - publication of the ECB's decision on the main interest rate (12:45 GMT).
EU - monetary policy report (12:45 GMT).
EU - ECB press conference (13:30 GMT).
US - number of initial and repeated applications for unemployment benefits (13:30 GMT).
On January 21, the most important event is the ECB meeting. But do not lose sight of the applications for unemployment benefits, which reflect the real level of unemployment in the country.
COT (Commitments of Traders) report:
The activity of major players at the beginning of 2021 remains quite weak. At 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 comes out with a three-day delay, thus, it does not take into account the drop in quotes of the last days. The "Non-commercial" category of traders, therefore, again increases long contracts, that is, believes in a new growth of the European currency? All charts now point to a very likely resumption of the upward trend.
EUR/USD forecast and recommendations for traders:
On Thursday, I recommend buying the euro with the targets of 1.2182 and 1.2214 on the hourly chart, as the closing was made on the downtrend line. It is not recommended to open sales of the pair yet, as all four charts predict the growth of the pair in the coming days.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
