Technical Analysis of EUR/USD for January 8, 2021

Technical Market Outlook:

The EUR/USD pair has moved lower towards the key short-term demand zone located between the levels of 1.2154 - 1.2177. A new local low was made below the level of 1.2154 at 1.2235 and below the Rising Wedge lower line as well. The positive momentum supports the short-term bullish outlook as long as the demand zone is not clearly violated. The next target for bears is seen at the level of 1.2177 and this might be the beginning of the correction. Any violation of the level of 1.2349 invalidates this scenario. The Rising 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.

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