EURUSD Barely Holds Support – 1.2050 Area Next

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Written By: Mircea Vasiu

Jan 14, 2021, 10:35 GMT 10:35

eurusd

Summary:

EURUSD gets ready for another leg lower as indicated by a continuation pattern. A move below 1.2040 should open the gates for another leg lower.

For whatever reason, the EURUSD pair found support at the 1.2140 area. It opened the week with a bearish tone and declined all the way to 1.2140 on Monday, only to reverse the move on Tuesday. Comes Wednesday, and the market is back in the area.

The USD is impressively calm these days, despite the events at the Capitol. The transfer of power, scheduled for January 20^th, will be the main event of next week, at least when it comes to the USD.

In the meantime, the Italian government has fallen. Yesterday the news did not create much of a reaction in the market, but instability during pandemic is just what the Italians needed (sense the irony).

All in all, the EURUSD pair forms a continuation pattern in the form of a head and shoulders during a falling market, with 1.20 being just around the corner.

EURUSD Continuation Pattern

The EURUSD fell from 1.2350 to the current 1.2140 in what seems to be a compelling bearish trend. The market barely holds support at 1.2140, and a move below should trigger some decent stops. Bears would want to go short at 1.2120 with a stop at 1.22 and a target at 1.2050 or even 1.20 for a nice risk-reward ratio.

EURUSD Price Forecast

Written By: Mircea Vasiu

Mircea, MBA in International Business graduating Magna Cum Laudae, trades for a living and contributes to various financial publications for more than six years. He writes about macroeconomics, stock indices, currencies, and most recently ETFs and individual stocks. For the past decade, he’s involved in everything trading related, mostly in the currency market, both with manual and algorithmic trading.