Technical analysis of EUR/USD for January 22, 2021

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Overview :

The EUR/USD pair fell from the level of 1.2233 to bottom at 1.2054 this week. But the trend rebounded from the last bearish wave of 1.2054 to close at the point of 1.2160.

Today, the EUR/USD pair faced strong support at the level of 1.2119.

So, the strong support has already faced at the level of 1.2119 and the pair is likely to try to approach it in order to test it again.

Hence, the EUR/USD pair is continuing to trade in a bullish trend from the new support level of 1.2119; to form a bullish channel.

According to the previous events, we expect the pair to move between 1.2119 and 1.2223. Also, it should be noted major resistance is seen at 1.2223, while immediate resistance is found at 1.2186.

Then, we may anticipate potential testing of 1.2186 to take place soon. Moreover, if the pair succeeds in passing through the level of 1.2186, the market will indicate a bullish opportunity above the level of 1.2223. A breakout of that target will move the pair further upwards to 1.2254.

Buy orders are recommended above the area of 1.2119 with the first target at the level of 1.2186; and continue towards 1.2223, then 1.2254.

On the other hand, if the EUR/USD pair fails to break out through the resistance level of 1.2186 ; the market will decline further to the level of 1.2054 (daily support 2).

Bearish outlook :
  • Besides, the daily resistance 1 is seen at the level of 1.2223. However, traders should watch for any sign of a bullish rejection that occurs around 1.2223. The level of 1.2223 coincides with 100% of Fibonacci, which is expected to act as a major resistance today. Since the trend is below the 1000% Fibonacci level, the market is still in a downtrend. Overall, we still prefer the bearish scenario.
The material has been provided by InstaForex Company - www.instaforex.com

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