FX.co ★ Trading plan for EUR/USD and GBP/USD for January 12, 2021

I have always considered the rhetoric of the Soviet regime supporters to be inadequate. But it turns out that it is still possible to make it worse. Thus, US authorities were able to set a new quality standard. I am talking about an impeachment resolution against President Trump published yesterday. The impeachment article states that Donald Trump "demonstrated that he will remain a threat to national security, democracy and the Constitution" and that he "deliberately incited violence against the Government of the United." Even the NKVD service tried to come up with more meaningful accusations during its campaign against counter-revolutionaries in the 30s. Looking at the market reaction, I can say that I am not the only one who thinks so. As soon as the impeachment document had been published, the US dollar immediately started to lose ground. Investors seem frightened by what is happening now. As I see it, the situation with Donald Trump looks more like the pursuit of political opponents after the defeat in a normal democratic political competition. This is usually typical of third world countries with underdeveloped democratic institutions and procedures. But here we are talking about the US that is the ancestor of modern democracy. So, investors are worried for a reason. Traditionally, the persecution of political opponents is followed by the distribution of their property, including their capital.

At the same time, the US dollar remains rather strong, especially amid the overbought European currencies. As a result, the single European currency returned to the levels where it was holding before the release of the impeachment document. The pound, however, failed to return to its previous levels. Of course, the euro's reversal looks rather strange, especially in the light of the above-mentioned events. But in fact, this is not surprising. After all, we are still talking about the plans of the Democratic Party, and not about certain steps or actions. The resolution will be considered tomorrow, and the vote in Congress is scheduled for January 14. Most likely, this initiative will have the same outcome as in 2016 when Democrats made an attempt to impeach Donald Trump immediately after his victory in the presidential election. Still, I do not think that this situation will have further negative development. The United States has been acting as a guarantor of capital and investment security for the past century. So, the very idea that something can go wrong in this institution seems unrealistic. In general, we can expect the pound to move down following the trajectory of the single European currency. This may happen even despite the worsening economic situation in the United States. According to labor statistics, the number of job openings in the US labor market is expected to decrease from 6,652,000 to 6,300,000. This data will be another confirmation of a weakening US labor market. Of course, the drop in the number of new job openings can be explained by the decreased number of unemployed who found a new job. However, a recent report from the US Department of Labor showed that the unemployment rate remained unchanged, while the total number of jobs has declined. So, the deterioration of the labor market is obvious. However, since the beginning of the pandemic, market participants seem to downplay the real economic situation.

Job Openings (United States)

The euro/dollar pair has reached the support level of 1.2130 after going through a corrective phase from the local high of 1.2349. From this support level, the price slowed down the pace of decline. The correction may continue if the price keeps holding below 1.2125 on the H4 time frame. Otherwise, the pair is likely to enter a flat channel.

The pound/dollar pair is following a similar trajectory in the market, after entering the corrective phase from a high of 1.3700. As a result, the price slipped to the area of the variable pivot point at 1.3450. The pair may resume the downtrend only if the price stays below the accumulation zone at 1.3503/1.3533. Otherwise, a wider fluctuation may send the price to the flat channel.