Analysis and recommendation for EUR/USD on January 8, 2021

In numerous articles of the past year, the option was not ruled out when the disagreement of one or both presidential candidates with the election results could lead not only to mass protests and riots but also to street clashes in various versions. In my opinion, one of the worst-case scenarios occurred when Capitol Hill was stormed by supporters of Donald Trump, who lost the presidential election. I will start with the fact that the day before in the first half of the day, the US Congress still approved Democrat Joe Biden as the new president of the United States of America. To be honest, this is standard procedure, and there was no doubt that this would happen and Biden would be confirmed. During the conclusion of the discussion of voting in the presidential election, a crowd exploded in the Capitol building, consisting of those who believed and still believe that it was not Biden who won the presidential election, but the still incumbent head of the White House, Donald Trump. Even though Joe Biden's victory was approved by Congress, the meeting had to be interrupted, after which the riots of Trump's supporters continued. As a result, as of last night, about 40 protesters were detained, whom President-elect Joe Biden called rebels and domestic terrorists. According to Biden, the riots were provoked by Donald Trump and he bears full responsibility for this. Trump himself, in his usual manner, condemned the events on Capitol Hill and said that he would surrender his presidential powers, although he still does not agree with the election results. Democrats, in turn, did not fail to take advantage of this situation and called for the impeachment of President Trump and for declaring him incompetent. These are the hot passions that have been simmering in the citadel of world democracy, on Capitol Hill. According to data from the United States, four people were killed during the riots, although there could have been many more victims. Now it looks like all the steam is out, Trump has announced that he is leaving, and Biden will be inaugurated as president on January 20.

For the EUR/USD currency pair, the main event of the day and all the week will be the publication of data on the US labor market, which will be released at 14:30 (London time). We will talk about this in more detail, taking into account the actual figures, on Monday. The only thing I would like to note is that the forecasts are very weak, it is clear that COVID-19 has done its job and significantly slowed down the recovery of the world's leading economy, as the Fed leaders warned about.

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Since the US dollar is the world's largest reserve currency, and often a safe-haven currency, yesterday's events in the US forced investors to go to safe havens, as a result of which the US currency strengthened against the euro. Trading on January 7 ended at 1.2271, which is lower than the seemingly already broken resistances of 1.2309 and 1.2272. Yesterday, it was noted that one closed candle (even a daily one) above 1.2309 may not be enough to consider this level truly broken. And so it turned out. Today's trading on the main currency pair will be determined by news from the United States and the reaction of investors to events related to the storming of the Capitol, as well as American labor reports. In such a situation, and even on the last day of weekly trading, I consider it incorrect to give specific trading recommendations. I suggest that we stay out of the market until Monday, and at the beginning of the new week, we will reflect on our trading plans.

The material has been provided by InstaForex Company - www.instaforex.com