EUR/USD – 1H.
On January 4, the EUR/USD pair performed a new rebound from the corrective level of 323.6% (1.2308), a reversal in favor of the US currency, and a fall to the level of 1.2272. The rebound of quotes from this level will again work in favor of the US dollar and the resumption of the fall in the direction of the next corrective level of 261.8% (1.2201). In America and the European Union, nothing interesting is happening now. At least nothing that could bring the American dollar back to life. The US Congress began work in the new year in an updated composition, the budget for 2021 was adopted, Donald Trump is due to leave office on January 20. It is from Donald Trump that the mainstream of news continues to come. The US president still cannot accept the election results and once again promised to present evidence of election violations during a protest rally on January 6. However, Trump's support is extremely low. Just the other day, former US defense ministers made an official statement that the elections in the country were held legally, and called on the current head of the Pentagon and the military in general not to interfere in politics and not to follow Trump's instructions. "The elections were held. All necessary calculations and checks were carried out. All the lawsuits filed were considered by the courts. The governors confirmed the results. The electoral college voted. The time to question the results is over. The time has come for the official counting of the electoral college votes, as provided for by the US Constitution," the joint statement said.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes performed a reversal in favor of the US dollar and a slight drop, however, overall growth remains. The upward trend line continues to characterize the mood of traders as "bullish". Thus, the growth process can be continued in the direction of the corrective level of 200.0% (1.2353). Fixing the pair's rate under the trend line will work in favor of the US currency and some fall in the direction of the Fibo level of 161.8% (1.2027).
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair continue the process of growth in the direction of the corrective level of 423.6% (1.2495). Until the moment when the pair makes a consolidation under the level of 323.6%, there are still high chances of growth.
EUR/USD – Weekly.
On the weekly chart, the EUR/USD pair performed a consolidation above the "narrowing triangle", which preserves the prospects for further growth of the pair in the long term.
Overview of fundamentals:
On January 4, the US and the European Union released indices of business activity in the manufacturing sectors. However, the indices themselves were not the most important, and their values did not give traders a reason to react to them.
News calendar for the United States and the European Union:
US - ISM manufacturing index (15:00 GMT).
On January 5, another index of business activity in the manufacturing sector will be released in America. In general, the information background will again be quite weak.
COT (Commitments of Traders) report:
The activity of major players in the last two weeks of 2020 was very weak. The "Non-commercial" category of traders, according to the latest COT report of December 29, got rid of 57 long contracts and opened new 1,660 short contracts. Thus, their mood has once again become more "bearish", but in general remains strongly "bullish", as the number of contracts focused on their hands remains strongly in favor of long (224,000 - 79,000). Nevertheless, their mood may become more "bearish", but this does not have much effect on the euro currency yet. Thus, I can conclude that speculators continue to look closely at the sales of the euro currency, but are waiting for the right moment or some kind of push.
EUR/USD forecast and recommendations for traders:
On Tuesday, I recommend selling the euro in case of a rebound from the level of 1.2272 on the hourly chart with a target of 1.2201. New purchases of the pair can be opened with targets of 1.2308 and 1.2353 when the quotes are fixed above the level of 1.2272 on the hourly chart.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy currency, not for speculative profit, but to ensure current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.