(DAILY NOTION) EUR/USD Possible Soared Above the Resistance Level at 1.2200, Next Mover: ECB rate decision

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(DAILY NOTION) EUR/USD Possible Soared Above the Resistance Level at 1.2200, Next Mover: ECB rate decision

Illustration photo of EUR/USD daily chart from Tradingview

The EUR/USD is tilting lower ahead of the important Fed interest rate decision. The EUR/USD is trading at 1.2130, which is 1.80% below the year-to-date high of 1.2357. 

The EUR/USD is falling partly because of the weak German sentiment numbers released yesterday by the Ifo Institute. The overall present and future outlook among managers is weak because of the rising Covid cases and the lockdowns imposed by the government. 

The EUR/USD is also falling as traders wait for the official interest rate decision by the Federal Reserve. Like the ECB did last week, the bank is expected to leave its interest rates and quantitative easing policies unchanged because the economy is not out of the woods yet. Traders will look at the dot plot and the statement by Jerome Powell.

In my analysis yesterday, I pointed that the euro was forming a head and shoulders pattern. Also, we noted that the pair were forming a rising channel pattern. Today, the pair has just moved below this channel, which is a vindication for the bearish cases. 

Therefore, in my view, I suspect that the pair will continue falling as bears target the next support level at 1.2050. This prediction will be invalidated if the price manages to move above 1.2200.

FOLLOWME EUR/USD Overall Sentiment (As of 03:29 p.m., Jan 26, 2021).

Short - 56.83%

Long - 43.17%

For information please refer to Crispus Nyaga.

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