EUR/USD – 1H.
The EUR/USD pair began to fall on January 27, when the Fed meeting was still more than 12 hours away from the start of summing up the results. During this fall, the pair performed a close under the ascending trend line, which now characterizes the mood of traders as "bearish", and then performed a fall to the corrective level of 127.2% (1.2072). The rebound of the pair's rate from this level has already worked in favor of the euro and the beginning of growth in the direction of the level of 100.0% (1.2131). However, at the moment, the quotes are stuck somewhere between the levels of 100.0% and 127.2%. The key event of yesterday was the Fed meeting and its results. Few traders expected the rates to be changed. It didn't happen. The base interest rate remained at 0-0.25%. The Fed also did not change the volume of the quantitative easing program - every month it will buy back treasury bonds worth at least $ 80 billion and mortgage-backed securities worth at least $ 40 billion. As before, the Fed believes that the current level of "rigidity" of monetary policy should be maintained until inflation reaches a stable 2%, and employment and unemployment levels do not reach pre-crisis levels. According to the Fed leadership, these factors are still most affected by the coronavirus epidemic. According to Powell, the pace of recovery in economic activity and employment has slowed in recent months. Thus, as a general conclusion, there was a phrase that the work on improving the economy has not yet been completed and is still far from being completed. In general, Jerome Powell did not tell traders anything optimistic.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes, despite the formation of two bullish divergences, still performed a reversal in favor of the US dollar and began a new process of falling in the direction of the corrective level of 161.8% (1.2027). Fixing the pair's rate under the level of 161.8% will increase the probability 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 quotes of the EUR/USD pair performed a new fall to the Fibo level of 323.6% (1.2079). A new rebound from this level will again work in favor of resuming growth in the direction of the corrective level of 423.6% (1.2496).
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.
Overview of fundamentals:
On January 27, the results of the Federal Reserve meeting became known in the United States, and a report on orders for long-term goods was released, which was weaker than traders' expectations. However, the US dollar still showed growth on this day, based on the optimism of traders about the Fed meeting.
News calendar for the United States and the European Union:
US - change in GDP for the quarter (13:30 GMT).
US - number of initial and repeated applications for unemployment benefits (13:30 GMT).
On January 28, all economic reports will again be only in America. A very important GDP indicator will be released after lunch, which may affect the US currency exchange rate on Thursday.
COT (Commitments of Traders) report:
On Friday, another COT report was released, which was intended to help answer the question, what are the prospects for the euro currency? And at the beginning of 2021, 2 COT reports out of 3 show that they are "bullish". During the reporting week, speculators again strengthened their "bullish" mood, opening 8,244 long contracts and 1,357 short-contracts for the euro currency. Thus, the category of "Non-commercial" traders is once again looking in the direction of increasing purchases of the euro currency. So they believe in its further growth. The total number of long contracts focused on the hands of speculators also remains quite high, three times more than the number of short contracts.
Forecast for EUR/USD and recommendations for traders:
It is recommended to buy the euro currency with the targets of 1.2131 and 1.2182 on the hourly chart when the rebound from the Fibo level of 127.2% (1.2072) is repeated. It was recommended to open the pair's sales if the pair closes below the trend line on the hourly chart with targets of 1.2072 and 1.1997. The first target is achieved. New sales are recommended at the close under the level of 127.2% with a target of 1.1997.
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 provide current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
