08.01.202010:46 Forex Analysis & Reviews: Analysis and forecast for EUR/USD for January 8, 2020

Greetings, dear colleagues!

Yesterday's statistics from the US were extremely positive and, as it seems, had not the least impact on the strengthening of the US currency across a wide range of markets.

Thus, the US trade balance rose to minus 43.1, although minus 43.8 was expected. Production orders came out at minus 0.7% against the forecast of minus 0.8%. In turn, the index of business activity in the service sector from the Institute of Supply Management (ISM) rose to 55.0, and the forecast value was 54.5.

Today, January 8, the following macroeconomic reports are expected. The eurozone will provide data on business sentiment in the currency bloc, as well as indices of economic sentiment, consumer confidence and business optimism in the industry.

The US will receive reports on changes in the number of employees from ADP. It is worth noting that the data from ADP is perceived by market participants as a leading indicator of Friday's Nonfarm Payrolls, so the reaction to these releases may be quite strong and have an impact on the course of today's trading.

Well, it's time to move on to the consideration of charts for the main currency pair of the Forex market, and let's start with the daily timeframe.

Daily

What happened was what was expected in the previous two reviews for EUR/USD. After a short-term correction, which was expected after the candle for January 3, the pair, according to the forecast, turned to decline. As expected, the closing of daily trading under the Tenkan line of the Ichimoku indicator will strengthen the position of sellers and make a bearish scenario even more likely.

The January 7 session ended below Tenkan. Despite the mid-week trading and the fact that the main events are still ahead, the superiority of the bears in the euro-dollar is already gradually visible. If the downward trend continues, the nearest target will be yesterday's lows at 1.1333. If they are updated, the pair will head to the level of 1.1125, where the minimum trading values were shown on January 3. A little lower, at 1.1120, the Kijun line of the Ichimoku indicator passes, and it will be the next target of players to lower the rate. I think that it is too early to talk about the longer-term goals of the bears for the euro-dollar. It appears that the anticipation of Friday's nonfarm will to restrain the activity of market participants.

Now let's talk about what the euro needs to do to resume strengthening the exchange rate. First, it is necessary to return the price above Tenkan and close trades above this line. But that's not all. The readiness of the players to increase to continue the upward trend is signaled by the closing of trading above the 233 exponential moving average, which is at 1.1182. In my opinion, this task is not easy, but it is the will of the market. We'll see.

H1

In order not to pile up articles with an abundance of charts, the hourly timeframe is often left without attention. And here we must admit that for entering the market and (or) placing pending orders - this is the most important schedule. So let's look at it.

The first thing that catches your eye, after yesterday's decline, the euro-dollar is already trading under the used moving averages, each of which can now resist attempts to grow. And such attempts, at the moment of completion of the review, are just observed.

If we follow our plan for the downward scenario, the next sales can be tried on the rise of the pair in the price zone of 1.1157-1.1173, where there are 233 EMA, 89 EMA, and 50 MA. Opening short positions at more attractive prices can be found with growth in the area of 1.1180/90.

As for purchases, they are, in my personal opinion, riskier. However, those who want to open long positions on EUR/USD can try to do it from the current prices (1.1150) or after a decline in the area of 1.135-1.1125. That's all for now.

Good luck!