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20.01.202209:10 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on January 20, 2021

The US dollar has noticeably strengthened its position over the past few days, which was bound to end in a local rebound. And apparently, this is exactly what happened yesterday. Nevertheless, it should be noted that the scale of growth of the euro with the pound turned out to be extremely insignificant. This suggests that the process is far from over.

Moreover, the US dollar may continue to weaken today due to only one reason – US statistics. The fact is that the forecasts for applications for unemployment benefits are extremely negative, although the number of initial requests may increase by 2 thousand, that is, remain unchanged. On the other hand, the number of repeated requests should increase by as much as 91 thousand, which is quite a lot.

From the point of view of the market, this is a serious deterioration in the situation in the labor market, which is quite a negative factor. Therefore, there is no reason for the US dollar to rise today.

Number of repeated applications for unemployment benefits (United States):

Exchange Rates 20.01.2022 analysis

At the same time, European statistics will be ignored, although inflation data is extremely important. The fact is that the final data being published should confirm the preliminary estimate, which showed an increase in inflation from 4.9% to 5.0%. The market has already taken into account this fact.

Inflation (Europe):

Exchange Rates 20.01.2022 analysis

The EUR/USD pair is in a pullback stage from the variable pivot point of 1.1315, which led to the euro's slight strengthening. In this situation, variable turbulence is possible within the upper border of the previously broken flat (1.1230/1.1370). If the downward cycle is still relevant in the market, the 1.1370 level may act as a resistance level, thereby reducing the volume of long positions.

Exchange Rates 20.01.2022 analysis

The GBP/USD pair returned to the level of 1.3600, where a pullback was formed at first, then stagnation. In this situation, a variable swing is possible in the area of 1.3590/1.3655, which is likely to become a lever for subsequent speculation in the market.

Exchange Rates 20.01.2022 analysis

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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