28.01.202604:29 Forex Analysis & Reviews: EUR/USD Overview. January 28. Trump's Vacation Has Become Much Longer

The EUR/USD currency pair continued its upward movement on Tuesday, which is not surprising at all. Some may say that there was virtually no macroeconomic background that day, making it more logical to see a flat or a correction. However, we warned that after the seven-month flat concluded, the pair wouldn't need any local reasons to continue its ascent.

In fact, no local reasons are needed now due to the presence of global fundamental factors driving the decline of the American currency. Throughout the past year, we have maintained the same view—the dollar will depreciate. Especially in the second half of the year, when the market entered a flat phase, and many traders lost faith in the pair's ability to continue rising. However, we warned that a flat is a time for market makers to accumulate and redistribute positions. In simpler terms, new positions are formed during a flat, after which trend movement begins.

Certainly, without Donald Trump's interference, the EUR/USD pair might have remained in the sideways channel for a few more months. However, Trump possibly felt that the dollar needed help and started the new year by launching criminal accusations against Jerome Powell, announcing a military operation in Venezuela, trying to acquire Greenland, and threatening new tariffs on countries in Europe, as well as countries trading with Iran and Canada. Therefore, most traders had no doubt about what to do with the dollar.

Now, on February 1, America will likely face a new "shutdown." Under Trump, it is appropriate to use the term "another shutdown." Trump's level of diplomacy is beyond this miserable three-dimensional universe, and he does not know how to make concessions. Because of actions by the Immigration and Customs Enforcement (ICE), which has killed two peaceful protesters in Minnesota over the past weeks, Democrats refuse to support the new funding bill. They demand that funding for the Department of Homeland Security (DHS), which includes the Immigration Service, be excluded from the budget, and that stronger requirements and oversight of the agency's actions be implemented.

Democratic representatives agree to vote for the bill if DHS funding is removed from the package, and stricter accountability measures are placed on the Immigration Service. Trump, who essentially incited the agency against American citizens, naturally disagrees with this approach and calmly warned the American people about the possibility of a new "shutdown."

So, what about the dollar? Is anyone really expecting that the events of the first month of 2026 will lead to a strengthening of the American currency? There is an unwritten rule among traders: "sell at highs, buy at lows." Well, this is not the case right now. The EUR/USD pair has returned to its three-year highs, but it will likely continue to rise. The more "wonderful" news and messages that come from the White House, the more the dollar will decline. By the way, let's recall that the last "shutdown" (in the fall of 2025) was practically not priced in. The dollar has accumulated a large number of unpriced factors pointing to a decline. Therefore, a rate of $1.19 against the euro is still very optimistic for the US currency.

The average volatility of the EUR/USD pair over the last five trading days as of January 28 is 94 pips and is characterized as "high." We expect movement between levels 1.1868 and 1.2056 on Wednesday. The upper linear regression channel points upward, indicating further growth for the euro. The CCI indicator entered overbought territory last week, indicating a downward correction that has already completed.

Nearest Support Levels:

S1 – 1.1902

S2 – 1.1841

S3 – 1.1780

Nearest Resistance Levels:

R1 – 1.1963

R2 – 1.2024

R3 – 1.2085

Trading Recommendations:

The EUR/USD pair continues its upward movement, which has recently accelerated. The global fundamental backdrop remains crucial for the market and remains highly negative for the dollar. The pair spent seven months in a sideways channel, and it is likely time to resume the trend. There is no fundamental basis for the dollar's long-term growth. Below the moving average, small shorts can be considered with targets at 1.1719 and 1.1658 based purely on technical grounds. Above the moving average line, long positions remain relevant with targets at 1.2024 and 1.2056.

Explanations for the Illustrations:

• Linear regression channels help determine the current trend. If both are directed in one way, the trend is currently strong;
• The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should currently be conducted;
• Murray levels are target levels for movements and corrections;
• Volatility levels (red lines) indicate the probable price channel in which the pair will operate for the next day, based on current volatility indicators;
• The CCI indicator entering the oversold area (below -250) or the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.