EUR/USD – 1H.
On January 13, the EUR/USD pair performed a reversal in favor of the US currency and resumed the process of falling quotes in the direction of the corrective level of 100.0% (1.2131). The pair's rebound from this Fibo level will work in favor of the EU currency and some growth in the direction of the corrective levels of 76.4% (1.2182) and 61.8% (1.2214). Closing quotes below the level of 100.0% will increase the chances of a further fall in the direction of the next corrective level of 127.2% (1.2072). Meanwhile, an unprecedented and expected event has taken place in America: Donald Trump was declared a second impeachment, and now he will forever go down in the history of the country as a president who was impeached twice. However, it should still be recognized that Trump was impeached only by the lower house of Congress. That is, this impeachment has no practical significance. In any case, Trump will remain president of the United States until January 20, and after January 19, when the US Senate will be convened in a new composition, a vote will be held in it, but the outcome is predetermined in advance. Democrats have 50 seats out of 100 in the Senate, and they need 67 votes to overthrow Trump. For Republicans, it just doesn't make sense. Thus, the political theater in the United States continues and even gains momentum. Trump is trying his best to whiten his name after the incident on January 6 in the Capitol, however, it seems that no one is listening to him.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes closed under the upward trend line. Thus, the mood of most traders has changed to "bearish", and the decline in quotes can be continued in the direction of the corrective level of 161.8% (1.2027). Today, the divergence is not observed in any indicator. Rebound from the Fibo level of 161.8% will work in favor of the European currency and some growth.
EUR/USD – Daily.
On the daily chart, the quotes of the EUR/USD pair began the process of returning to the corrective level of 323.6% (1.2079). The pair's rebound from this level will work in favor of the EU currency and the resumption of growth in the direction of the Fibo level of 423.6% (1.2496).
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 13, the ECB President made a speech in the European Union. She noted some positive points at the beginning of 2021, but in general her speech was neutral. The US inflation report came out above traders' expectations and could slightly support the dollar.
News calendar for the United States and the European Union:
US - number of initial and repeated applications for unemployment benefits (13:30 GMT).
US - Fed Board of Governors Chairman Jerome Powell will deliver a speech (17:30 GMT).
On January 14, America will release a report on applications for unemployment benefits, and in the evening, Fed President Jerome Powell will give a speech. This event is of critical importance.
COT (Commitments of Traders) report:
The activity of major players in the New Year's week was very weak. The "Non-commercial" category of traders, according to the latest COT report of January 5, opened 2,072 long contracts and 3,078 short contracts. That is, approximately the same amount. The same applies to the "Commercial" category of traders and the total number of open long and short contracts. First, these figures are very low, and second, without a serious bias in any direction. Simply put, speculators in the New Year rested more and celebrated than made transactions in the foreign exchange market. Thus, there are no special changes following the results of the next week. The mood of traders remains "bullish". A couple of months ago, the beginnings of a new downward trend appeared, however, the weakness of the dollar did not allow this option to be realized.
Forecast for EUR/USD and recommendations to traders:
On Wednesday, I recommend buying the euro with targets of 1.2182 and 1.2214 on the hourly chart, if the rebound from the level of 100.0% (1.2131) is made. New sales of the pair can be opened with a target of 1.2072 when closing quotes under the level of 100.0% (1.2072) 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.