19.01.202112:21 Forex-elemzések és áttekintések: EUR/USD analysis for January 19, 2021

Hi, everyone!

There is less than one day left till the inauguration of US President-elected Joe Biden. This fact raises the most important questions for both the United States and the whole world such as what America's 46th President will be and what changes to expect in the greatest world power during his presidency. As you know, the global situation largely depends on the foreign policy of the White House. This also applies to geopolitics and economics, which directly affects the global financial markets, including Forex. Another interesting fact is that US president Donald Trump will not attend Biden's inauguration. He intends to leave for his Mar-a-Lago club in Palm Beach, Florida. Notably, the inauguration of Joe Biden as President of the United States will take place amid unprecedented security measures. Thousands of National Guard troops will patrol the streets, while the Capitol, White House and large areas around them will be fenced off. There is no even time for accusing Russian hackers of carrying out cyber-raid against the US, targeting the federal government. The main reasons for such serious security measures are the alarming situation with the spread of COVID-19 in the United States, as well as the recent storming of the US Capitol building in Washington by Donald Trump's supporters.

In Europe, COVID-19 continues to spread. Britain with its new coronavirus strain records the highest coronavirus case rates. The authorities of the United Kingdom are going to ramp up its mass rollout of COVID-19 vaccinations. According to some reports, the government will begin a trial of round-the-clock injections and add more vaccination sites to increase the pace of delivery. Thus, the British authorities intend to significantly slow the spread of the deadly coronavirus.

Today's macroeconomic calendar does not include statistics from the United States. However, it is full of important releases from Europe, for example, the data on ZEW Economic Sentiment for Germany and the Eurozone.

Daily

Despite yesterday's continued rally of the US currency against the euro, there is another bullish reversal pattern of the candlestick analysis on the daily chart. This is a hammer with a bearish body. Importantly, the price has started to form this pattern at the strong support level of 1.2058 (brown line), where there is the 38.2% Fibonacci retracement level along the Fibonacci grid stretched between the levels of 1.1601-1.2349. Given the fading bearish divergence of the MACD indicator, we cannot exclude a correction in the quotes or even a resumed upward trend of the euro/dollar pair. Nevertheless, according to the weekly chart, market players are still trying to test the Gravestone Doji candlestick pattern formed two weeks ago. As stated in my previous articles, the uptrend may be resumed only after the price breaks through the strong technical level of 1.2350. Currently, the price is trading under strong pressure from sellers in this area. The bearish scenario will continue in case the price hits yesterday's low of 1.2053 and closes the daily session below this level. In this case, the euro/dollar pair is at risk of plunging into another very important technical zone of 1.2000-1.1975. In addition to the psychological level of 1.2000, there is the 38.2% Fibonacci level in this zone.

H4

A correction pattern can be clearly seen on the four-hour chart. After the price touched strong support in the area of 1.2050, a doji candlestick with a small bullish body and equidistant shadows appeared. Then the price started a corrective rally. For now, this growth should be considered as corrective. That is why I have stretched the Fibonacci grid between the levels of 1.2348-1.1601. I believe that in the price zone of 1.2165-1.2178, the price may face strong resistance and then rebound in the opposite direction again. On the chart, you can see the 50-day moving average, the 38.2% Fibonacci level, as well as the highs of January 14, from where the pair fell to 1.1600. Against this background, I think that the best way to make a profit is to sell the euro/dollar pair after the quotes rise to the highlighted price area, of course, if such a rise occurs. Short positions can be considered if reversal candlestick signals appear on this and (or) hourly charts near the level of 1.2150. Taking into account the corrective nature of the pair's current rally, I think it is too late to open long positions and I recommend you refrain from them. For now, anyway.

Good luck!