Analysis and forecast for EUR/USD on January 13, 2021

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Analysis and forecast for EUR/USD on January 13, 2021

Analysis and forecast for EUR/USD on January 13, 2021

Daily

Analysis and forecast for EUR/USD on January 13, 2021

Despite the gloomy bearish forecasts, the main currency pair managed to strengthen at yesterday’s trading. Trading on January 12 ended at 1.2205, which is slightly higher than the important technical level of 1.2200 and the blue Kijun line of the Ichimoku indicator. Nevertheless, the important and key resistance zone of 1.2200-1.2240, which was indicated the day before, has not yet been passed. Thus, in my opinion, a lot will depend on the results and closing price of today’s trading. Perhaps it will become clear – this was a correction, after which the euro/dollar will continue its upward trend or we are still seeing a change in the exchange rate. Before moving on to a more specific technical analysis, let’s briefly discuss what is happening in the United States and Europe. We will also highlight the important macroeconomic events of today.

In the United States of America, passions continue to boil over Trump. Parliamentarians from the Democratic Party of the United States sent an official request (resolution) to the House of Representatives of the American Congress regarding the impeachment of the still-current President Donald Trump. This step is explained by the riots on January 6 and the penetration of Trump’s supporters into the Capitol building. According to Democrats, the current President Donald Trump is a threat to the national security of the United States. That’s it – no more or less. Meanwhile, Democrat Joe Biden, who won the presidential election, is making very generous promises. In particular, Biden promised to allocate trillions of dollars to support the American economy affected by the COVID-19 pandemic. I wonder if the printing presses of the US Treasury will withstand such a load?

In Europe, the epic continues with the vaccination of the population. This process is moving very slowly, most Europeans do not trust vaccines for fear of side effects, as well as for some other reasons. It is necessary to note what an unprecedented advertising campaign is taking place concerning a particular vaccine and vaccination in general. The news shows footage of leaders of many world countries being vaccinated, reading out appeals from church representatives about the need for vaccination, and so on. As of last night, more than 90 million people in the world have already been infected with the coronavirus. Europe is groaning. In Germany, the quarantine may be extended for another two months, as another new strain of COVID-19 has been confirmed, this time African.

Now about today’s main events, which will be the speech of ECB President Christine Lagarde, which will take place at 10:00 (London time), and from the macroeconomic statistics, I recommend paying close attention to the US consumer price index, which will be published at 14:30 London time.

If we return to the technical picture, then, due to the optimism in the global financial markets, the demand for safe assets is falling, which is especially strongly reflected in the US dollar. Nevertheless, the last weekly candle “Tombstone” has not yet been broken and still retains all the chances of working out. In this regard, as well as the presence of bearish divergences of the MACD indicator on the weekly and daily charts, I suggest leaving the trading plan the same for now, where selling EUR/USD is the main trading idea. I recommend looking for opportunities to open short positions after the pair rises to 1.2240, 1.2270, as well as in the price zone of 1.2300-1.2345. If the euro/dollar overcomes the important technical level of 1.2350 and fixes above it, the downward scenario will have to be invalidated and prepare for purchases of the pair with targets in the area of 1.2460-1.2500.

The material has been provided by InstaForex Company – www.instaforex.com

Source : https://www.fx.co/forex_analysis/quickview/267995/