EUR/USD: moving to a local low 26 January 2021, 10:27

 

EUR/USD: moving to a local low

26 January 2021, 10:27

Scenario
Timeframe	Weekly
Recommendation	SELL STOP
Entry Point	1.2103
Take Profit	1.1934
Stop Loss	1.2180
Key Levels	1.1934, 1.2103, 1.2180, 1.2338

Alternative scenario
Recommendation	BUY STOP
Entry Point	1.2180
Take Profit	1.2338
Stop Loss	1.2110
Key Levels	1.1934, 1.2103, 1.2180, 1.2338

Current trend

The EUR/USD pair is correcting downwards, being at the level of 1.2129.

EUR remains rather weak in relation to its main competitors due to the difficult situation in the eurozone caused by the coronavirus. The French authorities said yesterday that they are considering the option of introducing a third national quarantine due to the large number of detected cases of infection with new strains of the disease from South Africa and the UK.

Macroeconomic statistics from Germany turned out to be rather weak. IFO Expectations index in January dropped to 91.1 points from 93 points in December. IFO Business Climate index for the same period fell to 90.1 points from 92.2 points in the previous month.

USD has slightly strengthened against the background of the approval by the US Senate of Janet Yellen's candidacy for the post of Secretary of the Treasury. It is reported that more than 50 senators have already voted for Yellen, which is enough for her to be approved in a ministerial position.

Support and resistance

On the local chart of the asset the price reversed and indicated the possibility of overcoming the local low. Technical indicators reversed and issued a new sell signal. The fast Alligator indicator EMAs crossed the signal line from above, and the histogram of the AO oscillator moved to the negative area.

Resistance levels: 1.2180, 1.2338.

Support levels: 1.2103, 1.1934.

Trading tips

If the asset continues the decline and the price consolidates below the local support level at 1.2103, short positions can be opened with the target at 1.1934. Stop-loss – 1.2180. Implementation time: 7 days and more.

If the price continues correctional growth and consolidates above the local resistance level of 1.2180, long positions with target at 1.2338 will be relevant. Stop-loss – 1.2110.