Jan 25 2021 0
Markets on Monday are always full of surprises. Let's check out the chart analysis for today to see what forex strategy we should use.
- The dollar has its first decline week in 2021 as investors are still leaning towards more risky currencies and betting that an economic recovery will push the dollar lower.
- A European Central Bank survey shows that the eurozone economy affected by the pandemic is likely to recover this year but at a slower rate than expected than forecast a few months ago, Growth can only be offset by 2022.
- As the US equities market climbed to record highs, Wall Street's "fear-measuring" futures contracts showed that some investors were buying insurance against the possible chaos. unexpected glitches related to the US vaccine deployment.
- Economic activity in the eurozone declined significantly in January as restriction / blockade orders hit the services sector, which is the dominant sector in the economy, a survey found.
After breaking the support of 103.6, the price bounced up and re-tested the long-term downtrend line, not falling as deep as expected. This move is threatening previous short orders. The reduction potential remains, but has been greatly reduced. You might consider exiting short orders. In case the price breaks the trend line, the price can approach the resistance zone 104. When this area is completely broken, then buyers should consider entering the order. Don't be in a hurry.
The price did not fluctuate much and created a spinning top pattern around 1.215. However, this signal is quite weak. We still keep the old assumption that we should not continue to sell. There is a possibility that the double bottom pattern will be complete and the price might approach the 1.225 zone. Price action around this zone offers further hints.
Price appears to be creating a bull trap as we are concerned. The weakening of the bulls right after breaking the threshold is reducing the likelihood of the trend continuing. GBPUSD was showing a bit of an upset once again. Current conditions are relatively difficult to trade. Pay close attention to the two resistance areas marked in red. If it is broken, the responses should be considered.
The price bounced up as expected after the previous bullish signals. Currently, the price zone 1.27 has been re-tested. Considering the selling pressure around the current downtrend line, it is difficult for the price to break it right when the previous drops are quite strong. Short-term reversal traders should take actions to minimize risk such as partially exiting the order or moving Stop Loss. Only add positions when the price breaks this trend line.
The probing short orders around the 0.78 area are profitable when the price falls quite sharply around this area. We continue to expect the price to get back to the 0.765 zone. When this area is destroyed, additional positions should be considered. In case the price breaks above the current channel line, we will temporarily abandon selling strategy.