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21.01.202505:12 Forex Analysis & Reviews: Forecast for EUR/USD on January 21, 2025

Relevancia 22:00 2025-01-21 UTC--5

On the day of Donald Trump's inauguration, it was announced that the new administration would not introduce "global" trade tariffs in the near future. This announcement led to an air of optimism in the markets; however, the U.S. Dollar Index fell by 1.26%, while the EuroStoxx 50 rose by 0.32%.

Despite the optimism, the situation may be overly simplistic, as tariffs on various strategic goods, such as automobiles, are expected to be implemented soon. The extent and impact of these tariffs, particularly against China, will largely depend on China's willingness to negotiate.

Additionally, investors are anticipating three Federal Reserve rate cuts this year. This expectation is driven not only by the prospect of lower inflation but also by the potential emergence of trade wars.

Major players seem to be taking advantage of the situation to push medium-sized dollar buyers out of the market. Reports indicate that large speculators have accumulated a record-long dollar position since 2019. Once their positions are liquidated, the dollar is expected to continue strengthening in the medium term.

However, CFTC data suggests that claims about these record positions may be misleading. Positions were larger at the beginning of 2020. And then, there was indeed an upward market reversal (in May), but that situation was linked to the pandemic and quantitative easing. Currently, these large positions could push the euro further downward without significant speculative spikes.

Exchange Rates 21.01.2025 analysis

We maintain our perspective: on the daily chart, the euro has reached resistance at the MACD line and began to decline today. If the price consolidates below the support level of 1.0350, it will pave the way for a move towards the first target at 1.0135. For a more substantial movement, the price may linger above the support level for a day, awaiting the Marlin oscillator to shift into negative territory.

Exchange Rates 21.01.2025 analysis

On the H4 chart, there are two significant support levels to monitor: the 1.0350 level and the MACD line at 1.0283. For the bears to gain full control, the price must break through both of these support levels.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Laurie Bailey,
Analytical expert of InstaSpot
© 2007-2025
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