Technical Analysis of EUR/USD for January 6, 2021

Technical Market Outlook:

The EUR/USD pair has hit the recent swing high at 1.2309 again, but then reversed quickly towards the lower trend line support. The market has made Bearish Engulfing candlestick patterns twice and a Pin Bar with a new high located at 1.2325, but it did not stop the bulls yet. For now, the zone located between the levels of 1.2154 - 1.2177 remains the key demand zone for bulls. The positive momentum supports the short-term bullish outlook as long as the demand zone is not clearly violated. The next target for bulls is seen at the level of 1.2555, but this might be the last push up for EUR/USD before the correction. Any violation of the level of 1.2154 invalidates this scenario. The Broadening Wedge price pattern is still in progress, so please notice that this particular pattern is a trend reversal pattern, which indicates a possible major correction on the EUR/USD soon.

Weekly Pivot Points:

WR3 - 1.2419

WR2 - 1.2360

WR1 - 1.2290

Weekly Pivot - 1.2236

WS1 - 1.2163

WS2 - 1.2103

WS3 - 1.2035

Trading Recommendations:

Since the middle of March 2020 the main trend is on EUR/USD pair has been up. This means any local corrections should be used to buy the dips until the key technical support seen at the level of 1.1609 is broken. The key long-term technical resistance is seen at the level of 1.2555. The market might be making the Broadening Wedge trend reversal pattern around the levels of 1.2200 - 1.2300. Any violation of the level of 1.2154 supports the trend change/corrective cycle scenario.


The material has been provided by InstaForex Company -