EUR/USD – 1H.
On January 28, the EUR/USD pair performed an increase to the corrective level of 100.0% (1.2131), rebounding from it with a reversal in favor of the US currency and resuming the fall in the direction of the corrective level of 127.2% (1.2072). The pair's quotes spend the last week between the levels of 1.2072 and 1.2182. Thus, we can talk about a certain side corridor, from which the pair can not yet exit. Therefore, traders need new reasons to buy the US dollar again or resume its global sell-off. Let me remind you that the US currency is growing only in January 2021, and before that, it was falling for months. Yesterday's US GDP report was disappointing. The increase in the fourth quarter was 4.0%, although traders had expected a value of 4.2%. It's not a big difference. However, this report created little pressure on the US currency on Thursday. But above the level of 1.2131, the quotes still failed to continue growing. The main thing is that the US dollar has not received the support it needs. Not from the Fed, not from Jerome Powell, not from the US GDP. Thus, at the moment, the level of 1.2072 is seen as the bottom of the entire fall of the pair during the first month of 2021. There are no special reasons to buy the US currency from traders now. But in Europe, the statistics yesterday pleased traders. The German consumer price index was 1.0% y/y, below traders' expectations. This is not the most important report for the euro/dollar pair, but still. In general, I am more inclined to close the pair's rate above the level of 1.2131 than to resume the fall of quotes.
EUR/USD – 4H.
On the 4-hour chart, the pair's quotes, despite the formation of two bullish divergences, still performed a reversal in favor of the US dollar and began a new process of falling in the direction of the corrective level of 161.8% (1.2027). Fixing the pair's rate under the level of 161.8% will increase the probability of a further fall in the direction of the next corrective level of 127.2% (1.1729).
EUR/USD - Daily.
On the daily chart, the quotes of the EUR/USD pair performed a new fall to the Fibo level of 323.6% (1.2079). A new rebound from this level will again work in favor of resuming growth in the direction of the corrective level of 423.6% (1.2496).
EUR/USD - Weekly.
On the weekly chart, the EUR/USD pair has made 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 28, the US released reports on GDP and applications for unemployment benefits. The GDP report was disappointing, and the applications report was slightly better than expected. Thus, perhaps, it is what kept the dollar from falling above the level of 1.2131.
News calendar for the United States and the European Union:
US - main index of personal consumption expenditures (13:30 GMT).
US - change in the level of household spending (13:30 GMT).
US - Chicago PMI (14:45 GMT).
On January 29, all economic reports will again be only in America. However, there will be no important reports, so the information background today will be extremely weak for the pair.
COT (Commitments of Traders) report:
Last Friday, another COT report was released, which was intended to help answer the question, what are the prospects for the euro currency? And at the beginning of 2021, 2 COT reports out of 3 show that they are "bullish". During the reporting week, speculators again strengthened their "bullish" mood, opening 8,244 long-contracts and 1,357 short-contracts for the euro currency. Thus, the category of "Non-commercial" traders is once again looking in the direction of increasing purchases of the euro currency. So they believe in its further growth. The total number of long contracts focused on the hands of speculators also remains quite high, three times more than the number of short contracts.
Forecast for EUR/USD and recommendations for traders:
It is recommended to buy the euro currency with the targets of 1.2131 and 1.2182 on the hourly chart with a new rebound from the Fibo level of 127.2% - 1.2072. New sales of the pair are recommended when closing at the level of 127.2% (1.2072) with a target of 1.1997.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.