4-hour timeframe
Technical details:
Higher linear regression channel: direction - upward.
Lower linear regression channel: direction - downward.
Moving average (20; smoothed) - downward.
CCI: -124.2776
The EUR/USD currency pair continued its downward movement on Monday, January 18, without paying any attention to the fundamental background at all. However, it should be noted that on Monday there was nothing special in the fundamental plan. All interested parties simply froze in anticipation of the day of the inauguration of Joe Biden. Many people say that this day will be special, however, the list of why it will be so is great. But let's return to the technique for now. The downward movement continues in a completely calm mode. There are no jerks or anything like the movement of the pound/dollar pair. As we wrote earlier, the two main pairs are now completely uncorrelated. Given the fact that we have been waiting for a significant downward movement for a long time, we believe that now is the time for the US currency to start getting more expensive, and the euro/dollar pair to start a downward trend.
Now we return to the "foundation", which at the moment does not affect the foreign exchange market. Moreover, more than 90% of the entire "foundation" over the past 9-10 months has also been ignored by market participants. However, we still do not recommend turning away completely from such an important analysis tool. It is better to be aware of everything, just remember that technical factors are now in the first place. In the States, there is now a full-scale preparation for the inauguration of Joe Biden. January 20 is called a special day for several reasons. First, on this day, the most odious president in the entire history of the United States will officially leave his post (and according to some opinion polls, the worst president). Secondly, on this day, the special services and the FBI expect riots, rallies, and protests, which has become a familiar event for America over the past year. Third, the current president of the United States is under impeachment procedure, for the second time, and with his departure, the impeachment procedure will not be canceled. And from our point of view, it is the impeachment procedure that is now the most interesting event in the world. The special services, together with the National Guard, have already prepared well enough for January 20. All of Washington is fenced off, the most important objects are surrounded by barbed wire, the military patrols the city. But the impeachment proceedings against the president, who will leave his post tomorrow, is very interesting.
We have already written more than once that the impeachment procedure is very complex and long-term. The last time, in 2019, when Trump was impeached by the House of Representatives, it took about three months for everything. Thus, Congressional Democrats could not fail to understand from the very beginning that it would not be possible to remove Trump from office before January 20 under any circumstances. So why did they even start this procedure? Some experts believe that in this way the Democrats express a protest against the policies and actions of Donald Trump. We believe that everything is much more complicated and has pronounced long-term plans. Which ones? To protect America from Trump and any of his relatives who may also want to go into politics. Impeachment once and for all will put an end to the political career of Trump and, most likely, his entire family. This is what the Democrats want to achieve. In principle, they can be understood. For 4 years, Trump has done a lot of ambiguous things that are out of the general vector and course of development of the country. That is, how to call everything that Trump did if almost on the first day of his presidency, Joe Biden is going to cancel many important decisions made by him? And if Trump comes after Biden again, will he reverse Biden's decisions and rebuild America again in his way? It turns out that the country will not develop and go forward, but will constantly be torn between Democrats and Republicans. Thus, Trump needs to be removed once and for all from big politics, and at the same time his entire family. Of course, this is a rather bold assumption. But do not forget that in the entire history of the United States, the president was impeached only 4 times. Of these, two times to Donald Trump. So it's not just Democrats who might want Trump to step away from big politics. In the camp of the Republican Party, they may also want Trump not to run for president in 2024. Republicans cannot help but realize that the crushing defeat in the 2020 elections, which will result in them not controlling any of the chambers of Congress, is also partly due to Trump. So even Republicans may want Trump to step down. Just hardly anyone wants to quarrel with him in the open.
It all comes down to 17 votes of Republican senators. It is the 17 Republican members of the Senate who can remove Trump from political affairs once and for all. Impeachment, which will be approved by the House of Representatives, will be transferred to the Senate. And there it is necessary that 67 senators voted "for" it. There are already 50 votes – these are Democratic senators. Therefore, we need another 17 votes of Republican senators, who will not risk anything if they vote "yes". But will they want to do it? Thus, the intrigue associated with Trump will continue even after he leaves the post of president of the United States.
Even though in recent weeks the political crisis has flared up again in the United States, and some believe that it did not end after all the events of 2020, the US currency decided to start getting more expensive this year. Naturally, this has little to do with the fundamental background, but we have already discussed this above. In Europe, quarantine is being tightened in some countries. In France, a curfew is being introduced. In Germany, they want to tighten the lockdown even more, in Austria - the lockdown has already been extended until February 7. We can not say that the euro is getting cheaper because of this news since the widespread "lockdowns" in Europe began in November. All this time, from November to mid-January, the European currency became more expensive, although there was no "lockdown" in the United States and their economy is objectively stronger at this time than the European one.
The volatility of the euro/dollar currency pair as of January 19 is 66 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.2008 and 1.2140. A reversal of the Heiken Ashi indicator to the top can signal a round of upward correction.
Nearest support levels:
S1 – 1.1963
S2 – 1.1841
S3 – 1.1719
Nearest resistance levels:
R1 – 1.2085
R2 – 1.2207
R3 – 1.2329
Trading recommendations:
The EUR/USD pair continues its downward movement. Thus, today it is recommended to stay in short positions with targets of 1.2008 and 1.1963 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 1.2207.
