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Forecast and trading signals for the EUR / USD pair for January 20. COT Commitment of Traders report. Analysis of Tuesday’s deals. Recommendations



DATE OF PUBLICATION: 2021-01-20 03: 03: 14EUR / USD 1H. On the hourly timeframe on January 19, the EUR / USD pair was trading more actively than on Monday, when Martin Luther King Day was celebrated in the United States and the markets were in a complete hibernation state. During the past day, the pair began a fairly strong upward correction, thanks to which the quotes consolidated above the descending channel. Thus, the downtrend has now been canceled, and the price needs to confidently overcome the Kijun-sen line, after which the uptrend may resume. Although the pair is now in a rather ambiguous situation. On the one hand, on the hourly chart, the price shows readiness for a new trip to the North. On the other hand, going outside the downlink can be an accident. However, we recommend now to act strictly according to the technical picture. Simply because the fundamentals are weak now, but even when they were strong, traders ignored them. Thus, in principle, as a factor, the fundamental background is now rather weak. Consequently, now buyers need to wait for the price to fix above the critical line in order to trade up, and short positions are not relevant now. EUR / USD 15M. On the 15-minute timeframe, both linear regression channels turned up. Thus, in the shortest term, the trend changed to an upward one. Now traders need to overcome the Kijun-sen line, after which there will be much less obstacles on the way of the pair upward. It looks like the price will try to get back to 2.5-year highs. COT report: What about the COT reports now? The last four reports showed minimal changes in the number of open contracts. Accordingly, there are minimal changes in the mood of professional traders. Only the latest report recorded an increase of 8.7 thousand contracts on a net position at once. Thus, the gap between Buy-contracts and Sell, which was clearly in favor of buyers, increased even more (229 thousand against 76 thousand). Thus, speaking in dry terms of numbers, the likelihood of resumption of growth in the European currency is now high, although a couple of months ago, large players were openly preparing for a new downtrend. They prepared, prepared, but in the end they admitted the error of this preparation. We still believe that the weak demand for the American currency is to blame. Thus, it was the dollar that prevented the euro / dollar pair from falling. But if this factor persists in the coming months (speculative), then the American currency may indeed resume its long-term decline. Other groups of traders and their data are less important now. The most important thing to understand is that the markets are quite ready to keep buying the euro and getting rid of the dollar. Even with the opposite fundamental backdrop. On Tuesday, January 19, there were again no major publications or news in the European Union and the United States. As we said earlier, at this time there are several powerful themes that could theoretically influence the movement of the pair. But even they don’t. What is the point, then, to pay attention to the latest statements by Donald Trump, to Joe Biden’s intentions to reshape the entire US policy for himself after Trump, to an almost undeniable package of stimulus measures that Democrats can take purely on their own, to the speech of Janet Yellen, who is not believes that the exchange rate should be influenced by the central bank or government? All this is nothing more than just interesting information. Neither the euro nor the dollar pays any attention to it. On the third trading day of the week in the European Union, the publication of the consumer price index for December is scheduled. It is expected to remain negative at -0.3% y / y. This means that inflation will remain deflationary. Christine Lagarde has said this more than once – low inflation is caused by the high rate of the European currency. This slows down the recovery of the European economy. In the States, only the inauguration of Joe Biden is scheduled for today. Let’s hope the whole event goes smoothly. Based on the above, we have two trading ideas for January 20: 1) Buyers return to the game, as the price has consolidated above the descending channel. Thus, the trend has changed to an upward trend. It is recommended to open new long positions with targets at the resistance levels of 1.2179 and 1.2228. Take Profit in this case can be up to 80 points. There are certain fears that the exit of quotes from the channel may be false, but there are still no other reasons for trading now. 2) The bears have released the initiative from their hands. Therefore, short positions will not be appropriate for a while. Although if the pair fails to gain a foothold above the Kijun-sen line (1.2138) (a clear and eloquent rebound will take place), then you can even try to sell the euro / dollar with a target of 1.2026. Take Profit in this case can be up to 90 points. However, in this case, it is recommended to trade short with small volumes. Burning forecast and trading signals for the GBP / USD pair. You can place Take Profit levels around them. The Kijun-sen and Senkou Span B lines are the Ichimoku indicator lines transferred to the hourly timeframe from the 4-hour timeframe. Support and resistance areas are areas from which the price has repeatedly bounced. Yellow lines are trend lines, trend lines. channels and any other technical patterns. Indicator 1 on the COT charts – the size of the net position of each category of traders. Indicator 2 on the COT charts – the size of the net position for the “Non-commercial” group. Material provided by InstaForex – www.instaforex.com Source – InstaForex

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