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29.01.202605:16 विदेशी मुद्रा विश्लेषण और समीक्षा: Overview of the EUR/USD Pair. January 29. Trump Draws a Line Under the Dollar Disputes

The EUR/USD currency pair began correcting on Wednesday and fell sharply throughout the day. However, such a decline does not, first, affect the current technical picture and trend, and second, it was expected after the earlier sharp rise in quotes. Recall that a completely vertical move typically does not last long. This is exactly what we observed on Tuesday. As is customary, we will not consider the FOMC meeting results in this article. We still believe that at least 12-24 hours should pass for the market to digest all the information received and calm down.

Why did the dollar accelerate its decline on Tuesday? It's simple. Donald Trump. In general, if you see another decline of the American currency on the charts or exchanges, you can be sure of who is behind it. Trump talked about the "too expensive" dollar back during his first term in the White House. At that time, it turned out that these were just the flowers, and the dollar, after four years of Trump's presidency, did not change much against its competitors. With his return to the White House, Trump immediately took the bull by the horns. He stated openly that the stronger the dollar, the lower US exports to other countries. And it was the negative trade balance that the Republicans wanted to correct.

Therefore, it was clear last year that under Trump, the dollar would not rise. Of course, the trade war was not initiated by the leader of the White House to lower the dollar rate. His controversial legislative acts are also unlikely to be tied to a desire to depreciate the American currency. But these, if one may say so, are parts of one puzzle. And yesterday, Trump openly stated that he was pleased with the current dollar rate but hinted that if it fell even lower, it would be even better. After these words from the American president, the decline accelerated.

Now, dear traders, try to answer one simple question: how can one expect the strengthening of the American currency if Trump's entire policy only evokes one desire among market participants – to run away from the dollar without looking back? If the President of the United States openly states that the dollar should fall as low as possible? If Trump insists on easing the FOMC's monetary policy, which will also lead to a decline in the American currency? We have been talking about this all last year. And now, a seven-month flat is over. There are countless factors behind the decline of the American currency. In a few days, a new "shutdown" will begin, and Trump will raise and impose tariffs as soon as he has new complaints against anyone on this planet. And complaints will arise regularly; you can rest assured.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of January 29 is 124 pips and is characterized as "high." We expect the pair to trade between 1.1810 and 1.2058 on Thursday. The upper linear regression channel is pointing upward, indicating continued euro growth. The CCI indicator entered the overbought area last week and formed a "bearish" divergence this week, signaling an upcoming pullback. Note how volatility increased as soon as the pair left the sideways channel of 1.1400-1.1830.

Nearest support levels:

S1 – 1.1841

S2 – 1.1719

S3 – 1.1597

Nearest resistance levels:

R1 – 1.1963

R2 – 1.2085

R3 – 1.2207

Trading recommendations:

The EUR/USD pair continues its upward movement, which has sharply intensified recently. The global fundamental backdrop remains extremely negative for the dollar, which remains of great significance to the market. The pair spent seven months in a sideways channel, and it is likely that the time has come to renew the trend. For long-term growth, the dollar has no fundamental basis. When the price is below the moving average, small shorts can be considered with a target of 1.1719 on purely technical grounds. Above the moving average line, long positions remain relevant with targets of 1.2058 and 1.2085.

Explanations for the Illustrations:

• Linear regression channels help determine the current trend. If both are directed in one way, the trend is currently strong;
• The moving average line (settings 20,0, smoothed) defines the short-term trend and the direction in which trading should currently be conducted;
• Murray levels are target levels for movements and corrections;
• Volatility levels (red lines) indicate the probable price channel in which the pair will operate for the next day, based on current volatility indicators;
• The CCI indicator entering the oversold area (below -250) or the overbought area (above +250) means that a trend reversal in the opposite direction is approaching.

*यहां पर लिखा गया बाजार विश्लेषण आपकी जागरूकता बढ़ाने के लिए किया है, लेकिन व्यापार करने के लिए निर्देश देने के लिए नहीं |

Paolo Greco,
Analytical expert of InstaSpot
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