empty
14.01.2025 01:57 PM
EUR/USD: How Will Trump's Inauguration Impact the Dollar?

1.0154. However, midday saw a reversal favoring the euro, initiating growth toward the Fibonacci level of 127.2% at 1.0255. A consolidation above this level could indicate further growth toward the next corrective level at 100.0%, or 1.0336. Conversely, a rebound from 1.0255 would suggest renewed declines toward 1.0154.

This image is no longer relevant

The wave situation remains clear. The last completed upward wave did not breach the peak of the previous wave, while the new downward wave has already twice broken the previous low. This indicates the continuation of a bearish trend, with no signs of reversal. A confirmed reversal would require a confident rise of the euro above 1.0460 and consolidation at this level, which seems unlikely in the near term.

Monday lacked significant news, but trading was highly active. Initially, the dollar continued to strengthen, consistent with the ongoing bearish trend. In the second half of the day, a pullback occurred, likely due to profit-taking. In other words, the dollar had no fundamental reason to fall, but traders occasionally close short positions to lock in gains, causing retracements.

Tuesday will bring the US inflation report—a highly anticipated event. If inflation falls below 2.8%, the dollar could extend Monday's decline. Lower inflation would imply that the Federal Reserve may not need to adjust its monetary policy plans for 2025. On January 20, Donald Trump's inauguration may also influence the market, as recent bearish activity could be linked to this factor. Post-inauguration, I expect the dollar to weaken further, depending on Trump's initial actions as president.

This image is no longer relevant

On the 4-hour chart, the pair has already rebounded twice from the 127.2% corrective level at 1.0436 and consolidated below 1.0332. If sellers can push the pair below the 161.8% level at 1.0225 for the second time, the next target will likely be 1.0110. The downward trend channel clearly reflects current market sentiment. Without a breakout above this channel, significant euro growth is unlikely. No emerging divergences are observed today.

Commitments of Traders (COT) Report

This image is no longer relevant

The latest COT report indicates that speculators opened 9,335 long positions and 10,392 short positions during the last reporting week. Sentiment among the Non-commercial group remains bearish and is strengthening, suggesting further declines in the pair. Total long positions held by speculators are now at 168,000, compared to 238,000 short positions.

For 16 consecutive weeks, major players have been reducing positions in the euro. This underscores an ongoing bearish trend without exceptions. While occasional weekly dominance by bulls occurs, it is more of an anomaly. The primary driver for the dollar's recent weakness—expectations of FOMC policy easing—has been fully priced in. Unless new factors emerge, the dollar's growth remains the more likely scenario. Technical analysis also supports a continued long-term bearish trend for EUR/USD.

Key Economic Events for the US and EU

  • US: Producer Price Index (PPI) (13:30 UTC)

The January 14 economic calendar includes only one minor entry, suggesting weak influence from the news cycle on market sentiment.

EUR/USD Forecast and Trading Tips

  • Sales: Trades could have been initiated following a rebound from the 1.0405–1.0420 zone on the hourly chart, targeting 1.0336–1.0346 and 1.0255. All targets have been met, and existing short positions can still aim for 1.0154 and 1.0110 if a rebound from 1.0255 occurs.
  • Buys: Possible at rebounds from the 1.0154 and 1.0110 levels, but given the strong bearish trend, I would not recommend buying at this time.

Fibonacci Levels:

  • Hourly chart: Built between 1.0336–1.0630
  • 4-hour chart: Built between 1.0603–1.1214
Samir Klishi,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Trading Signals for EUR/USD for January 16-19, 2025: buy above 1.0290 (21 SMA - 4/8 Murray)

The key is to stay alert. If the EUR/USD pair manages to consolidate above the 200 EMA, we could expect a trend change so that the euro could continue

Dimitrios Zappas 13:57 2025-01-17 UTC+2

Trading Signals for GOLD (XAU/USD) for January 17-21, 2025: sell below $2,725 (overbought- 6/8 Murray)

The eagle indicator is showing overbought signals, so we will look for opportunities to sell in the next few days as long as the gold price remains below 6/8 Murray

Dimitrios Zappas 13:56 2025-01-17 UTC+2

Forecast for EUR/USD on January 17, 2025

The EUR/USD pair struggled to maintain support for bulls as bears continued to profit. On Thursday, the pair traded sideways, but Friday brought a renewed shift in favor

Samir Klishi 13:45 2025-01-17 UTC+2

Forecast for GBP/USD on January 17, 2025

On the hourly chart, GBP/USD failed to consolidate below the 1.2191 level on Thursday. A rebound from this level provided an opportunity for buying, but the resulting growth was weak

Samir Klishi 11:43 2025-01-17 UTC+2

Forex forecast 17/01/2025: EUR/USD, GBP/USD, Gold, Oil and Bitcoin

Useful links: My other articles are available in this section InstaForex course for beginners Popular Analytics Open trading account Important: The begginers in forex trading need to be very careful

Sebastian Seliga 10:47 2025-01-17 UTC+2

EUR/USD and GBP/USD on January 17 - Technical Analysis of the Situation

The past day has been marked by uncertainty and stagnation in the market. The currency pair is currently drawn to the daily short-term trend zone at 1.0308. As we approach

Evangelos Poulakis 08:14 2025-01-17 UTC+2

Forecast for EUR/USD on January 17, 2025

In the past day, the euro has experienced slight upward movement, as indicated by its technical indicators. If the signal line of the Marlin oscillator crosses into positive territory

Laurie Bailey 03:46 2025-01-17 UTC+2

Forecast for GBP/USD on January 17, 2025

Yesterday, the pound broke through the lower shadow of the daily candle for the fourth consecutive day at the support level of 1.2186. Given the ongoing uncertainty ahead

Laurie Bailey 03:46 2025-01-17 UTC+2

Forecast for AUD/USD on January 17, 2025

The Australian dollar tested the upper boundary of the descending price channel on the daily chart yesterday and then retreated downward. The failure to break above the channel reinforces

Laurie Bailey 03:46 2025-01-17 UTC+2

Trading Signals for EUR/USD for January 16-19, 2025: buy above 1.0260 (21 SMA - 4/8 Murray)

On the contrary, if the euro consolidates below the 21 SMA and below 4/8 of Murray in the next few hours, it is likely to continue its bearish sequence

Dimitrios Zappas 16:05 2025-01-16 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.