In last week's trading, all major currencies, except for the Japanese yen, strengthened against the US dollar. In particular, the main currency pair of the Forex market increased by 0.76%. Thus, it can be concluded that the intentions of the US President-elect regarding the volume package of fiscal stimulus gave market participants reason for further optimism and risk appetite. In principle, so far everything that is happening is within the framework of expectations. After all, even during the US presidential election race, it was repeatedly noted that if Biden wins, risk sentiment will increase, and the US dollar will decline. At the moment, everything is going in this direction. I would also like to remind you that this trend, caused by the victory of Joe Biden, will be quickly recouped, after which investors will calm down a little and will more closely monitor the macroeconomic statistics, as well as technical factors. By the way, since we have already touched on the fundamental topic, the main event of this week will be the decision of the US Federal Reserve System on rates, after which a press conference will be held by Fed Chairman Jerome Powell. I wonder how the Fed chief's rhetoric will change (and whether it will change at all) with the arrival of a new president and the appointment of the former head of the US Central Bank, Janet Yellen, to the post of Finance Minister. From the events of today, I recommend paying attention to the IFO indices for Germany, as well as to two speeches by the head of the ECB, Christine Lagarde. You can learn more about these and other events by looking at the economic calendar.
Weekly
Despite the growth shown at the auction on January 18-22, it is too early to consider that the development of the bearish candle signal "Tombstone" was fully completed. For such a conclusion, it is necessary to close the weekly candle above 1.2349. In addition to the strong support level at 1.2053, I would like to draw attention to the red line of the Ichimoku Tenkan indicator, which has provided strong support for the pair over the past two weeks and closed above this line. In order not to beat around the bush for a long time, I will express my personal opinion that judging by the weekly timeframe, it is not possible to make unambiguous conclusions about the further movement of the quote. I would like to emphasize once again that in a bearish scenario, the main goal will be a breakdown of support at 1.2053. In turn, the euro bulls need to break through the levels of 1.2309 and 1.2349 with the mandatory closing of weekly trading above the last mark.
Daily
In this timeframe, it is visible that since January 21, the euro/dollar is traded between the Tenkan and Kijun lines of the Ichimoku indicator. At the same time, the Friday doji candle will play an important role in the subsequent direction of the quote. If the euro bulls manage to absorb this candle with growth and gain a foothold above the blue Kijun line, there will be almost no doubt about the further growth of EUR/USD. Players have their tasks to improve, and they are quite complex. For the pair to be bearish, it is necessary to lower the price under the Tenkan red line, then break through the 50 simple moving average, which is now located at 1.2104, and be sure to consolidate below 50 MA.
If you go to the trading recommendations, at the moment, more promising are the purchases that you can try after a short-term decline in EUR/USD in the price zone of 1.2160-1.2110. For those who are bearish and eager to sell, I recommend tracking the price behavior in the event of a rise in the price area of 1.2200-1.2225 and after the appearance of bearish candle patterns on the four-hour and (or) hourly charts, open deals for sale. With targets near 1.2140-1.2110.