EUR/USD – 1H.
Hello, dear traders! On January 22, the pair advanced to 1.2182 - the 76.4% Fibo retracement - and rebounded from it. However, it was a small drop in the price of EUR/USD. Today, the pair have already returned to this level. In case of a new rebound, the price is likely to fall to 1.2131 - the 100.0% Fibo retracement. If the price closes above the 76.4% Fibo retracement, the upward trend will possibly extend to 1.2214 and 1.2240 - the 61.8% and 50.0% Fibo retracements respectively. Meanwhile, Donald Trump left the White House as the US President for the last time. Joseph Biden took office. Nevertheless, Trump's story is far from the end. Thus, Congress introduced articles of impeachment against Trump one week before the end of his term. Yesterday, it became known that the House will send all necessary impeachment documents to the Senate this week. Consequently, the Senate will hold an impeachment trial against Trump already in the near future. Congress has already approved articles of impeachment, since the majority there are Democrats. As for the Senate, it is required that 67 senators, of which only 50 are Democrats, vote in favour of impeachment. That is, 17 Republican votes are needed. Some experts believe that this is not such an impossible task, since Trump's popularity in the Republican Party has plummeted after he lost the election. On top of that, many Republicans do not want Trump to run for president in 2024. Thus, by impeaching Trump, lawmakers intend to deprive him of the opportunity to run for president in four years as well as from holding high government posts in the United States.
EUR/USD – 4H.
On the 4-hour chart, after the formation of a bullish divergence close to the MACD indicator, the price continues its rally to 1.2353 - the 200.0% Fibo retracement. If the price closes below the 161.8% Fibo retracement, the downtrend will resume to the next Fibo retracement level of 127.2% - 1.1729. However, the two shorter time frames indicate the possible extension of the upward trend.
EUR/USD – Daily.
On the daily chart, EUR/USD rebounded from 1.2079 - the Fibo retracement level of 323.6%. Thus, the currency pair is likely to surge to 1.2496 - the Fibo retracement level of 423.6%. The third chart in a row also indicates the continuation of the upward trend.
EUR/USD – Weekly.
On the weekly chart, EUR/USD consolidated above the narrowing triangle, preserving the prospects for the pair's uptrend in the long term.
Round-up:
On January 22, both the EU and the US released their services and manufacturing business activity data. The reports turned out to be optimistic except for Europe's services PMI. Anyway, the euro ignored this fact.
Macroeconomic calendar for EU and US:
ECB President Christine Lagarde will deliver two speeches.
The macroeconomic calendar in the US is completely empty.
Commitments of traders report (COT):
On Friday, another Commitments of traders report was released, which reflects the prospects for the euro currency. Two out of three COT reports released in early 2021 indicate bullish sentiment. During the reporting week, speculators once again strengthened their bullish sentiment and opened 8, 244 Long contracts and 1,357 Short contracts. Thus, Non-commercial traders are again looking towards increasing purchases of the euro. This means they believe in its further growth. The total number of Long contracts in the hands of speculators also remains quite high, three times more than the number of Short ones.
Outlook for EUR/USD and trading recommendations:
On Monday, one should enter long if the price closes above 1.2182 - the 76.4% Fibo retracement level - with targets at 1.2214 and 1.2240 on the hourly chart. Alternatively, one should enter short if the price closes below the trend line on the hourly chart with targets at 1.2072 and 1.1997.
TERMS:
Non-commercial traders are major market players such as banks, hedge funds, investment funds, private, and large investors.
Commercial traders are commercial enterprises, firms, banks, corporations, and companies that buy currency not to obtain speculative profit, but to ensure current activities or export-import operations.
Non-reportable positions are small traders who do not have a significant impact on the price.
