Early in a new week of January, EURUSD reached stability close to 1.1380 after several days of sales. Despite a lot of risks, the USD is looking pretty stable.
Investors’ attention is still focused on the US Government Shutdown. Now it’s safe to say that the current shutdown is the longest in the American history – the government hasn’t been operating for more than 30 days. What does it mean? It means that a lot of public sector employees, from librarians to regular civil servants, do not get any wages, because they are on unpaid leave. However, it was impossible to keep their wages: the Congress still hasn’t decided on financing the American government. The key stumbling block in this case is the Mexican border issue and the US President Donald’ Trump’s intention to build a wall to decrease the number of immigrants.
The USA have a holiday today. There will be few macroeconomic reports from the USA this week, that’s why the Government Shutdown will continue being the “hottest potato” among market players.
On Thursday, the European Central Bank will have another meeting, but market expectation are quite low. The time for the benchmark rate revision hasn’t come yet, it is expected to remain unchanged for at least 6 more months.
Looking at the H1 chart of EURUSD, one can see that the current correction inside quite a narrow trading range is taking too much time already. The previous descending impulse tested the support line of the projected channel. The current support level is at 1.1355. After rebounding from the support, the price is trying to break the resistance line of the short-term descending channel. If the pair breaks the resistance line at 1.1392, the instrument may start a new uptrend towards 1.1435 or even 1.1475. However, if the price fails to break the resistance line, the pair may break the support level and fall up to 1.1300.
By Dmitriy Gurkovskiy, Chief Analyst at RoboForex
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.