FX.co ★ Analysis and forecast for EUR/USD on February 2, 2021

The main euro/dollar currency pair started trading in the new week with a decline, which turned out to be quite impressive. The strengthening of the US dollar, according to some experts, was influenced by the better economic situation in the United States, as well as the more successful mass vaccination of the country's citizens against the COVID-19 pandemic than in Europe. As for the personal opinion of the author of this article, these are very far-fetched pretexts to explain the strengthening of the US currency. Relative to COVID-19, the United States remains the leader in the number of deaths from the coronavirus epidemic. As for the world's largest economy, which is still the American one, its recovery from the negative effects of COVID-19 is proceeding at a moderate pace. This, in particular, in his last speech, was told by the Chairman of the US Federal Reserve System (FRS) Jerome Powell. At the same time, the head of the Federal Reserve complained about the weaker-than-expected growth rates of inflation and employment. Carried away in yesterday's article by the results of the closing of January trading, I did not identify the main macroeconomic events of the current week. Let's take a look at the economic calendar together and see what interesting things are prepared in it for market participants. The main events of today will be the preliminary reports on the GDP of the eurozone for the fourth quarter of last year, which will be published at 11:00 London time. Then, during the US session, there will be speeches by members of the US Federal Open Market Committee Mester and Williams. Of course, the main macroeconomic reports will arrive on Friday, when the US labor market data for January will be published. I believe that these releases will draw a line under the results of weekly trading on EUR/USD. In the meantime, let's move on to the technical picture of the main currency pair of the Forex market.

Daily

As already noted at the beginning of the review, following the results of yesterday's trading, the EUR/USD pair showed a fairly significant decline. However, it is necessary to note one very important point, namely, that the support in the area of 1.2060-1.2050 once again showed its best side and did not let the quote go lower. Yesterday's lows were fixed at 1.2055, and the trading of the first day of February ended at the already well-known level of 1.2058. Thus, the euro bears again failed to push through strong support near 1.2050, and today, at the time of writing, the euro/dollar is growing at a moderate pace, and the pair has already risen to 1.2087, after which it retreated slightly and is trading near 1.2076. I believe that it will be extremely important for the euro bulls today to finish trading not only above the mark of 1.2100 but also with the exit from the daily cloud of the Ichimoku indicator, whose upper limit is at 1.2115. However, from the red line of the Tenkan and the 50 simple moving average, now, after their breakdown, we can expect strong resistance to the price, so the tasks of the players to increase look quite difficult\. Most likely, a strong driver will be needed for the growth of the single European currency, which may turn out to be the already mentioned reports on the GDP of the eurozone.

H4

On the four-hour timeframe, the pair trades under all three moving averages used: 50 MA, 200 EMA, and 89 EMA. I believe that each of these moving averages can provide decent resistance to attempts to grow and turn the quote down. Since all three moving averages are located in the price zone 1.2130-1.2136, it is recommended to consider sales from here, which at this stage of trading seem to be the main trading idea. At the breakdown of support in the area of 1.2050, I would not sell, it is too risky. Even though there are no impenetrable lines or levels in the market, another rebound, or even a reversal, may occur from the support zone of 1.2060-1.2050. I believe that it is better to wait for the true breakdown of this area, and already on the rollback to it to open short positions on EUR/USD. This will be possible if there is no pullback to the area of 1.2130-1.2136. At the very end of writing the article, we will see that after a small rebound and a white candle, the pair turned down again, and apparently, once again will test the key support area near 1.2050 for a breakdown. We wait and react to everything that happens in time.