Since January 3, the euro is trading in an uptrend according to the 1-hour chart. At this moment, it is located above 2/8 of Murray and below the SMA of 21. The markets are waiting for the inflation data from the United States. If the data confirms soaring inflation in the US, we could see a strong impulse of the euro towards resistance level of 3/8 Murray around 1.1413.
The resistance zone of 1.1413 located around 3/8 Murray could offer a strong top for the euro and we could expect a correction again towards the support 2/8 Murray in 1.1352.
The testimony of Fed Chairman Jerome Powell in front of the Senate disappointed some investors. He said that the decision to begin reducing the Fed's balance sheet could take between two and four policy meetings and that it was not under discussion for now.
These comments gave the impetus for the euro to break the 200 EMA located at 1.1327. As the dollar continues its downtrend, it is likely that the euro can take advantage of the greenback's weakness. We could see the euro reaching the key level of 1.1500 in the coming days.
The eagle indicator is reaching overbought levels. It is likely that in the coming days the euro may make a technical correction and fall back to the level of 1.1327 (200 EMA) or down to 1.1291 (1/8).
Our trading plan is to wait for the euro's consolidation above the SMA of 21 located at 1.1365. In this case, we will be able to buy with targets at 1.1413 where 3/8 of Murray is located.
On the other hand, a pullback to the resistance zone will be a good opportunity to sell if EUR/USD consolidates below 1.1413 (3/8) with targets at 1.1352 (2/8).
Support and Resistance Levels for January 12 - 13, 2022
Resistance (3) 1.1441
Resistance (2) 1.1413
Resistance (1) 1.1387
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Support (1) 1.1352
Support (2) 1.1336
Support (3) 1.1287
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Scenario
Timeframe H4
Recommendation: buy above
Entry Point 1.1360
Take Profit 1.1390, 1.1413 (3/8).
Stop Loss 1.1325
Murray Levels 1.1352 (2/8) 1.1413 (3/8)
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Alternative scenario
Recommendation: Sell if pullback
Entry Point 1.1413
Take Profit 1.1377, 1.1352 (2/8)
Stop Loss 1.1449
Murray Levels 1.1291 (1/8), 1.1230 (0/8)
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