Hot forecast for EUR/USD on 29/01/2021

Investors behaved as if nothing else was published aside for the preliminary data on the GDP of the United States for the first quarter. The data allegedly came out worse than forecasts. Instead of 4.2% in the last three months of last year, GDP grew by only 4.0% though there were quite a lot of forecasts that predicted this. This caused disappointment since the most optimistic forecasts did not come true. If we look not at the quarterly data instead of the annual data, the rate of economic decline slowed from -2.8% to -2.5%. There is not much difference. Nevertheless, after the publication of data, the Euro began to grow steadily in value.

GDP growth rate (United States):

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The market had to wait for the opening of the Asian session, so someone could look at what was happening from the point of view of common sense. After all, GDP data refers only to what has already been. What will be is much more important. This is what we are told by the data on the labor market, which again, did not reflect the forecasts. They turned out to be significantly better. The number of initial applications for unemployment benefits decreased from 914 thousand to 847 thousand. The number of repeated requests decreased from 4,974 thousand to 4,771 thousand. It was expected that the initial applications will be reduced to 900 thousand and repeated will increase to 5,250 thousand. Forecasts predicted an actual increase in unemployment and an increase in its duration. Contrary to this, the situation in the labor market continues to improve. Though it is improving at a slower rate than we would like it to. In general, during the Asian session, the Euro returned to its original positions, where it was before the publication of GDP data. We will have to remember about the problems of Europe with vaccination, which recently became the main topic of discussion. Given that things are clearly not going well in this aspect, the Euro may continue to gradually weaken. Moreover, the macroeconomic calendar is completely empty.

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

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The EUR/USD currency pair showed a local upward interest in the first half of the American session, but it was not possible to keep buyers in the market. As a result, there was a slowdown with the reverse course of the price.

The overall market dynamics was about 60 points, which is not much, but it is not considered a slowdown in the market. Speculative activity took place in the market at the time of the publication of statistics for the United States.

If we proceed from the current location of the quote, then we can see the recovery process that has already returned the quote to the base area of the previous day.

Considering the trading chart in general terms, in the daily period, there is a medium-term upward movement, where relative to January, there was a corrective movement from the trend maximum.

We can assume that the quote is aimed at the area of 1.2050/1.2070. This area recently played the role of a support in the market. In order to see drastic changes, the quote needs to stay below 1.2050 for a four-hour period. This will lead to the resumption of the correction course. Until the level of 1.2050 is broken, the amplitude fluctuation is not excluded.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments on the hourly and daily periods signal a sale, following a corrective course. Minute intervals changed the signal from buy to sell at the time of the recovery movement relative to the upward surge.

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

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