FX.co ★ Overview of the EUR/USD pair. January 14. The Republican leader in the Senate will decide the fate of Donald Trump. Mike Pence rejected the 25th Amendment to the US Constitution.

4-hour timeframe

Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - downward.

CCI: -72.1128

The EUR/USD currency pair on Wednesday, January 13, corrected to the moving average line, rebounded from it and resumed its downward movement. A long-awaited downward movement. Thus, for at least another couple of days, the US dollar may feel good after two months of continuous decline. We still cannot conclude that the fundamental background affects the mood of the markets. If you look at the situation as a whole, the last round of the fall of the US currency began the day after the US presidential election. That is, we can assume that it was Joe Biden's victory in the elections that provoked the fall of the US currency. At first glance, it is even logical because the dollar tends to fall under Democratic presidents. However, Biden is not yet president. Moreover, if the US currency has fallen because Biden won the election, what will happen when Biden becomes president? In general, to be honest, the "speculative" factor looks more convincing as an explanation for the fall of the US dollar in recent months. The fall of the last couple of days is explained by a banal technical correction. The pair has been growing for a long time, so sooner or later a correction should have started. We still recommend paying more attention to technical analysis, as the fundamental background is now completely ambiguous, and many global macroeconomic factors are completely ignored. We have already written about them many times. The most important is the state of the EU and US economies in the fourth quarter of 2020 – the first quarter of 2021.

Well, all the attention of traders is now focused on the US Congress, which is preparing to vote for the impeachment of Donald Trump. Most likely, the House of Representatives will approve the impeachment. Simply because the majority in it are Democrats. But then everything will be decided by the US Senate. Recall that to remove Trump from power, 67 senators must vote "yes". The Democrats have 50 votes at best. This means that 17 Republicans should vote "for" the removal of Trump. Why do they need it? After all, even when Trump leaves his post as president, he will remain in the Republican Party. Why would anyone quarrel with him? Moreover, in any case, Trump will leave the post of president in a week! Here we are talking about either the complete exclusion of Trump from the party or the rejection of impeachment. That is, either pan or disappeared. Some American media, however, report that the former leader of Republican Senators Mitch McConnell, who has several times clashed with Donald Trump, but always supported him as president, is rumored to be ready to approve impeachment. If this is true, then McConnell, as a fairly important figure in the ranks of Republicans, can listen to other members of the party. In this case, the question will already be about the complete exclusion of Trump. In the lower house of Congress, several Republicans are also ready to vote against Trump, but there are no additional votes needed. The Democrats are strong enough. Thus, the question of Trump's future is now: will there be a conspiracy against Trump in the ranks of the Republican Party? Given the fact that Trump is going to run for president in 2024, it can be assumed that many Republicans would like their party's nominee to be not Trump. Simply because Trump's chances of winning in 2024 will be extremely small. Biden must fail even more miserably than Trump himself so that Americans will again give preference to the odious Donald in four years. And this is hard to believe. Thus, if the conspiracy takes place, it is not to remove Trump from the post of president, but to remove him from big politics once and for all.

US Vice President Mike Pence has approximately the same position. Recall that the Democrats published a resolution days earlier, which requires the removal of Trump. Democrats gave Pence 24 hours to decide whether to remove the president from office under the 25th Amendment to the US Constitution. However, Pence did what many expected him to do. He did not quarrel with Trump a week before the end of his presidential term. For what? For the sake of living in the White House for one week? Pence wrote an open letter to Congress, in which he urged not to make decisions that could further divide the country, and also said that he did not consider the removal of Trump a decision that is in the interests of the country and the Constitution.

Trump again began to warn, threaten, and do all this unfounded. The president warned Democrats against such actions (impeachment). "Be careful what you wish for," Trump said in Texas. As always, Trump did not say what would happen if the Democrats continued their attempts to remove him from office. However, the Democrats are not too afraid of Trump. Thus, in the coming week, we will continue to follow political news from across the ocean, as they are simply impossible to miss. It is still impossible to conclude that all this news has an impact on the US currency or the euro/dollar pair. We prefer a technical correction based on profit-taking by buyers in long positions. Therefore, we support the further movement of the euro/dollar pair down. In the longer term, the US dollar, from our point of view, will also become more expensive, but this hypothesis is too contrary to the current state of affairs when the demand for the dollar is still too low. COT reports, by the way, also do not allow us to conclude that the major players have finally abandoned purchases of the European currency. Thus, there is no evidence that the upward trend is complete. In addition to overcoming the price of moving.

The volatility of the euro/dollar currency pair as of January 14 is 85 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.2239 and 1.2069. The reversal of the Heiken Ashi indicator back to the top can signal the resumption of the upward movement.

Nearest support levels:

S1 – 1.2085

S2 – 1.1963

S3 – 1.1841

Nearest resistance levels:

R1 – 1.2207

R2 – 1.2329

R3 – 1.2451

Trading recommendations:

The EUR/USD pair resumed its downward movement. Thus, today it is recommended to stay in short positions with a target of 1.2085 until the Heiken Ashi indicator turns up. It is recommended to consider buy orders if the pair is fixed back above the moving average with a target of 1.2329.