20.01.202514:36 Analisis Forex & Kajian: EUR/USD: January 20th. A Crucial Week for the Dollar

On Friday, the EUR/USD pair continued to trade sideways between 1.0255 and 1.0336. The market has taken a pause ahead of Donald Trump's inauguration and is waiting for further developments. There are no clear trading signals, levels remain untested, and the movement is horizontal. Bears maintain their hold on the trend.

The wave structure remains clear. The last completed downward wave broke the low of the previous wave, while the last (still unfinished) upward wave has yet to break the previous peak. This confirms the continuation of the bearish trend, with no signs of reversal. For a trend reversal to occur, the euro must rise above 1.0460 and close above this level within the current wave.

Friday's news was once again relatively weak. Not only were the reports of secondary importance, but the upcoming Trump inauguration significantly dampened traders' risk appetite and overall market activity. Ahead of this major event, no one wanted to take unnecessary risks.

Friday Highlights:

• The Eurozone inflation report did not provide any new information.
• In the US, building permits for December came in at 1.483 million, slightly above expectations.
• Housing starts totaled 1.499 million, also above forecasts.
• Industrial production grew by 0.9%, exceeding the expected 0.3%.

These positive US figures gave bearish traders ample reason to continue their attacks. However, as mentioned earlier, the market remains cautious about Trump's decisions. His previous term was marked by numerous impactful events that influenced the global economy and US relations with other countries. Now, as Trump prepares to take office, he has already promised to "take action" against the EU, China, and Canada. Understanding which promises Trump will actually fulfill in the near future is crucial.

On the 4-hour chart, the pair returned to 1.0332 and rebounded. The pair continues to move within a downward trend channel, clearly signaling sustained bearish sentiment among traders. Therefore, the outlook favors a reversal toward the dollar and further declines toward 1.0110. None of the indicators currently show any emerging divergences. A significant euro rally is unlikely until the pair closes above the trend channel.

Commitments of Traders (COT) Report:

During the latest reporting week:

• Speculators closed 3,743 long positions and 7,470 short positions.
• The Non-commercial group remains bearish, suggesting further declines in the pair.
• Speculators hold 162,000 long positions and 223,000 short positions.

For 18 consecutive weeks, major players have been offloading the euro. This indicates a bearish trend with no exceptions. Occasionally, bulls dominate for a week, but these are rare deviations. The key factor for dollar depreciation—expectations of FOMC policy easing—has already been priced in. While new reasons for selling the dollar may emerge (possibly this week), the greenback's rise remains more likely. Graphical analysis supports the continuation of the long-term bearish trend. Therefore, further declines in EUR/USD are expected.

News Calendar for the US and Eurozone:

• USA: Donald Trump's Inauguration.

January 20 features only one event on the economic calendar, but it has the potential to impact the global market significantly. The information background may strongly influence market sentiment.

EUR/USD Forecast and Trading Recommendations:

Short positions were valid after a rebound from the 1.0336–1.0346 zone on the hourly chart, with targets at 1.0255 and 1.0154. These trades can remain open with Stop Loss set to breakeven. The price has already come close to the first target twice.

Long positions will only be viable after rebounds from 1.0154 and 1.0110, or if the pair closes above the 1.0336–1.0346 zone.

Fibonacci Levels:

• Hourly Chart: 1.0336–1.0630
• 4-Hour Chart: 1.0603–1.1214