Last trading week the EUR/USD currency pair was in a downtrend, when the recent statements of the almost inaugural President Joe Biden supported the dollar rate.
In the US, they said they would print another $ 2 trillion to flood the stock market and increase liquidity in general in the financial markets.
Throughout the autumn and the first half of winter, we observed the opposite trend, when exactly the same printing of cut paper, at the same record pace, only led to an increase in the euro rate and a weakening of the dollar rate.
Right now, the EUR/USD quotes are near the important support level of 1.2050. An unsuccessful attempt to fix the eurodollar rate below will show the market that the currency pair is working out a trend reversal pattern, followed by a short-term upward movement in order to test the resistance level of 1.2270.
If the support level is broken, the EUR/USD quotes will tend to the price of 1.1980.
The closest resistance level for the euro is the dollar at 1.2130. Successful breaking of this level will open the way for the EUR/USD quotes to the level of 1.2220. This level has twice recently acted as an important resistance and support level.
Technical analysis indicators (Ichimoku indicator) confirm the downward trend in the euro dollar. EURUSD quotes are below the Ichimoku cloud, the blue signal fast line of the indicator is below the red slow one. However, do not forget that indicators follow the trend and not vice versa.
Thus, in the event of a rebound in the price of the euro / dollar from the support level of 1.2050, the EUR/USD forecast for 01/18/2021 and the entire next week assumes a short-term upward trend in order to reach the resistance level of 1.2270.