The EUR/USD pair was trading exactly as we expected last night. We can only hope that the trades during the day will go according to plan. In the meantime, the MACD indicator is sufficiently discharged, and the pair sufficiently corrected after the first upward spurt, and that night a new strong buy signal was formed (circled). Thus, novice traders had all the necessary reasons to open long positions and, if they did so, then they are already in profit by around 17 points. However, the signal has not yet been canceled and, logically, the upward movement should continue at least to the 1.2155 level, which is yesterday's high. Therefore, it is not time to leave long positions. As for short positions, you shouldn't consider them now, since we currently have an upward trend.
In terms of foundation, everything will be interesting today, but quite simple. First, take note that Joe Biden's inauguration was quiet and calm. There were no riots and clashes between the protesters and the police or the National Guard. Biden took the oath, made a speech. Donald Trump also quietly and calmly left the White House and was not present at the inauguration. The results of the European Central Bank meeting will be summed up today, at which it is unlikely that any important decisions will be taken. Recall that since the spring of 2020, when the PEPP program, a program to counter the consequences of a pandemic, was adopted and approved, it has been expanded and extended in terms several times. The last time was during the final meeting for 2020, so today the ECB is unlikely to make any important decision again. We are not talking about rates at all, the ECB has not changed them for a very long time, and they remain ultra-low. Thus, the most interesting will be ECB President Christine Lagarde's press conference. Her first speech of the year was very optimistic; today there can also be a fiery speech. From our point of view, the report on claims for unemployment benefits in the US will be more interesting. If for the second week in a row there is still a tendency for an increase in the number of primary and secondary orders, then the US dollar may come under pressure from the market today and fall in price, which we, in fact, expect, considering the technical picture of the euro/dollar pair.
Possible scenarios on January 21:
1) Long positions became convenient since the price settled above the descending channel. A buy signal has been generated, so at the moment you should already be in long positions. You are advised to stay in them while aiming for resistance levels 1.2150 and 1.2194. You can close long positions if the MACD indicator turns down.
2) Trading for a fall has been canceled. Now, to resume trading down, the new upward trend must be unequivocally reversed. To do this, an upward channel or trend line must be formed and then canceled. Or, the price should fall below the current local low of 1.2055. There is nothing like this yet.
