It is better to refrain from transactions in EURUSD until the press conference of the head of the Fed

On Tuesday, January 26, trading in the EUR / USD pair ended with growth. The euro gained 0.19% against the US dollar to 1.2160. The price increased to 1.2176. Appetite for risk has grown unexpectedly for everyone. There was no news behind the growth of the pair. Market participants were selling dollar ignoring negative news from Europe. Several of them: Italian Prime Minister Giuseppe Conte has officially announced his resignation. The IFO data on business sentiment released in Germany on Monday heightened concerns about the potential impact of the pandemic and lockdowns on the economy. German Chancellor A. Merkel said that the management of the pandemic in Germany has gotten out of control and more stringent restrictions are needed.

Speculators could sell the US dollar ahead of the FOMC meeting and J. Powell’s press conference on Wednesday. The regulator is not expected to make any changes in monetary policy or new economic forecasts. Investors will be waiting for more information on the prospects for the adoption of new measures to support the US economy in the amount of $ 1.9 trillion.

EURUSD fell sharply to 1.2140 from 1.2176 after reports that the ECB called to question the dollar’s weakness despite the strengthening US economy. This was reported by K. Lagarde. She said that the ECB will study the impact of ECB policies versus Fed policies on exchange rates. Buyers bought back the fall, raising the rate to 1.2168.

Scheduled statistics (GMT + 3)

  • At 12:00 Switzerland will present an index of expectations of Swiss investors, according to the ZEW and Credit Suisse for January.
  • At 16:30 the US will announce a change in the volume of orders for durable goods for December, and at 18:30 – a change in oil reserves according to the Department of Energy.
  • At 22:00 in the US, the FOMC decision on the main interest rate will be announced and the FOMC Covering Statement will be released.
  • The FOMC press conference will take place in the USA at 22:30.

Current situation

The euro is worth 1.2159 this morning. The price is in the middle of the ascending channel above the balance line and below the resistance (1.2170). The channel range is 88 points. Today the attention of market participants will be riveted to the FOMC meeting and J. Powell’s press conference.

Major currencies are showing mixed performance against the US dollar. Almost all euro crosses are in positive territory. On the upper border of the channel, the target for buyers is at 1.2204. For sellers, the target is at the lower channel line at 1.2120. Since yesterday the euro recovered without news, ignoring negative factors, it is better to refrain from transactions until the head of the US Federal Reserve speaks, or to keep a finger on the pulse in order to quickly leave the market before an important event.

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