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EUR/USD Forecast January 21

Good day forex traders and readers.

It is the second day of the trading week and i hope you are doing good 🙂 I am observing the EUR/USD ‘s reaction at the region of 1.35 – 1.352 and hence flat for now.

In the previous EUR/USD forecast we noted that the currency pair tested the support of 1.3520. As there was basically no adverse developments for the euro zone, the bearish pressure was probably due to the US Dollar strength.


Technical Analysis

Looking at the EUR/USD daily chart above we note that the currency pair is once again testing the support of 1.35 – 1.352. As mentioned previously, a failure of this support will probably open up an extended bearish target of 1.34.

Immediate resistance lies around 1.36. If the bulls return to push on, we may expect 1.3680.

Fundamental Analysis

The market sentiments seem to continue to favor the US dollar and hence the strengthening of it. Sentiments may be positive due to favorable economic developments in the US. For example, November’s housing starts was revised upwards resulting in the best figure since November 2007. Long time readers will know that as I always mentioned, housing is an important aspect of the economy and hence the influence on the sentiments.

Over at the Euro Zone, the German ZEW Economic Sentiment came out worst than expected and thus further dampening the demand for the euro currency.

Trade safely.

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