Overview of the EUR/USD pair. January 4. The Senate and Congress are ignoring Trump. The bulls retreated from the market,

4-hour timeframe

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Technical details:

Higher linear regression channel: direction - upward.

Lower linear regression channel: direction - upward.

Moving average (20; smoothed) - sideways.

CCI: -45.1389

The EUR/USD currency pair started a round of corrective downward movement on the last trading day of last year. At the end of the day, the pair's quotes were fixed below the moving average line, so the trend at the moment has become downward. At the same time, we cannot fail to note the strongest upward movement of the European currency at the end of last year. It may not be the strongest, however, the pair updated the previous local high quite simply and easily. Thus, in the last month of 2020, the euro currency updated its 2.5-year highs three times. Isn't this evidence of a strong and confident upward trend? Although we still believe that the strengthening of the euro is completely illogical and unreasonable, from a fundamental point of view, it should be recognized that traders find reasons to continue buying the euro and selling the dollar. We have already discussed these possible reasons, and they have nothing to do with the fundamental background, macroeconomic statistics, or technical signals. We have already compared the current growth of the euro with the pound sterling until 2007, an increase of oil up to 2008, or an increase of bitcoin right now. That is, by and large, the current growth is best called "speculative". Market participants simply believe that the euro currency will continue to grow and continue to buy it in the hope of making a profit from the exchange rate difference. And it does not matter whether there are real reasons for the euro to become more expensive or not. As a result, the euro continues to grow, it is bought even more, and it continues to grow.

Meanwhile, in the States, Donald Trump's power continues to crumble like a house of cards. The US president is losing his authority and absolutely everyone understands that he will leave in just two weeks. This is understood not only by ordinary Americans but also by Congress and the Senate. This explains the first time in four years of Trump's rule that both Congress and the Senate have overcome his veto. We are talking about a veto on the defense budget, which Trump called "a gift to Russia and China". However, the Congressmen did not think so and were the first to vote "for" the budget - 322 to 87. That is, not only Democrats voted "for" the defense budget, but also Republicans who could support Trump, but no longer consider it necessary to do so. The same goes for senators, who approved the defense budget with a score of 81 to 13 votes. Thus, the defense budget will be approved, despite Trump's veto. Recall that the president wanted to allocate money to strengthen control over social networks and change other points of the document.

After both houses overrode the veto, Trump naturally erupted in criticism of Republican senators. "Our Republican Senate missed an opportunity to get rid of Article 230, which gives unlimited powers to big tech companies. Pathetic!", said Trump. Article 230 punishes online platforms for user-generated content and requires them to moderate it. The cancellation of this article and Trump intended to achieve since social networks have repeatedly marked his posts with notes "not true", "doubtful" and others. It is also reported that Republican senators will not support a new bill providing for an increase in financial assistance to Americans from $ 600 to $ 2,000. According to Republican senators, this is excessively high spending. They also refused to support such initiatives during the autumn negotiations between the two parties on a new stimulus package. Recall that the Democrats insisted on allocating 2.2 trillion dollars, and the Republicans did not agree to more than 1 trillion. Now Trump has dramatically changed his mind and supports increasing payments to Americans, but not all Republicans support their president. Not all of them. "They want to give people devastated by the Chinese virus $ 600 instead of the $ 2,000 they need. Dishonest and unwise!", Donald Trump commented on this situation.

Meanwhile, Georgia continues to verify the signatures of voters. Trump has previously claimed thousands of election violations, especially in the four "contested" states that Biden won. The day in Cobb County, Georgia, we found 2 errors in the ballots that were sent by mail. Thus, the accuracy of the results is 99.99%.

In general, now we can say for sure that despite all the statements of Trump, Vice President Mike Pence, and Trump's lawyer Rudolph Giuliani, Donald lost the election and is unlikely to be able to change the results. On January 6, the results of the electoral college vote should be officially announced, although they are already known. Biden won by a wide margin. 7 million votes, to be precise. Well, along with the fall of Donald Trump, the fall of the US currency continues. We cannot conclude that it is Trump's lost election that is causing the dollar to fall. It cannot be said that the US currency grew under Trump. There were periods of ups and downs. Thus, we continue to recommend paying the most attention to the technical picture. At the moment, it signals the beginning of a correction, which theoretically can develop into a downward trend. However, the demand for the euro currency is extremely strong, so the correction may be weak, as well as the previous few turns, which are visible in the illustration.

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The volatility of the euro/dollar currency pair as of January 4 is 67 points and is characterized as "average". Thus, we expect the pair to move today between the levels of 1.2150 and 1.2284. A reversal of the Heiken Ashi indicator to the top can signal a new round of upward movement.

Nearest support levels:

S1 – 1.2207

S2 – 1.2146

S3 – 1.2085

Nearest resistance levels:

R1 – 1.2268

R2 – 1.2329

Trading recommendations:

The EUR/USD pair has started a round of corrective movement. Thus, today it is recommended to hold open short positions with targets of 1.2207 and 1.2150 until the Heiken Ashi indicator turns up. It is recommended to consider buy orders if the pair is again fixed above the moving average line with targets of 1.2268 and 1.2284.

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