EURUSD: Euro Sees Profit-taking Ahead Of The Weekend

Trading in the EURUSD pair ended with gains on Thursday, January 21, up 0.47 to 1.2162. Heightened market volatility was seen during the speech of ECB President Christine Lagarde.

The ECB left the rates and the volume of the PEPP programme unchanged. Lagarde reaffirmed that inflation in the region remains low and that a soft monetary policy is adequate for the current situation. She also pointed out that interest rates will remain low until inflation accelerates.

In addition, Lagarde warned of a renewed upsurge in Covid-19 infections and extended lockdowns that could threaten the region's economic prospects. Buyers brushed aside this issue. After sharp multidirectional fluctuations in the range of 1.2137-1.2170, the euro rate returned to the level of 1.2170.

Today’s macro agenda

  • 11:15 to 12:30 PPI in France, Germany, the Eurozone and the UK (January)
  • 16:30 Canada retail sales (November)
  • 17:45 US: industrial production and service sector PMI (January)
  • 18:00 US: pending home sales (December)
  • 19:00 US: EIA weekly petroleum status report
  • 21:00 US: Baker Hughes weekly oil rig count

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Current outlook

At the time of writing, major currencies are trading in the red. For the dollar, a correction phase began after a 38-hour pullback. The euro is currently trading at 1.2161. The rise from 1.2077 to 1.2177 is almost identical to the upward movement from 1.2054 to 1.2158.

The price bounced off the upper line of the current channel. The dollar is on the rise across the whole FX market. Despite gains in euro cross pairs, the single currency fell 0.16% against the dollar. Looking at the decline in the price action on January 21, the balance line (1.2137) will be the first target, the second will be the 45-degree angle (1.2121), and the third is the lower line of the channel (1.2100).

Disclaimer: Forecasts which are made in the review constitute the personal view of the author. Commentaries made do not constitute trade recommendations or guidance for working on financial ...

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