FX.co ★ Analysis of EUR/USD on January 7. Chaos in Washington and Democrats' all out victory

The wave pattern of the EUR/USD still remains the same, which indicates the progress of building the upward section of the trend and its supposed wave 5. If you ask, how long will the supposed wave 5 turn out to be? It was already said that it depends on the US currency as it serves as the main impulse of the pair. However, since it remains quite low, the upward trend section might rather become complicated and lengthy.

Nevertheless, the wave pattern in the smaller time frame indicates a possible completion of the upward section even despite complexity in building wave 3. The inner wave structure of the expected wave 5 looks rather convincing. At present, its inner wave 5 is in progress, but it could be completed anytime. The thing is that amid low demand for the US dollar, wave 5 in 5 could get more complicated and lengthy. So, everything will depend on market sentiment.

The news background is still filled with US reports during the final week of 2020 and the first week of 2021. Last year ended with a fight between US Congress and Donald Trump regarding the 2021 budget, defense budget, and aid package for American citizens and businesses. As the new year began, the fight for power also started. Yesterday, it was noted that the fate of the Senate was being decided in the state of Georgia. If the two Democrats won, then both the Senate, the House of Representatives and the White House would be completely under the control of the Democratic Party. And this is what really happened. Georgia, where the second round of Senate elections took place on January 5, was won by two Democrats. The U.S. Congress met that night to approve the results of the presidential election. However, the meeting was interrupted by a crowd of Trump supporters who broke into the Capitol building and tried to prevent the approval of the election results.

Due to this, the special services were called to restore order after a few hours. Donald Trump is to be blamed in this incident, as he called on his supporters to go to the Capitol several times. Earlier, he also announced a rally in Washington on January 6, as a protest to the rigged Democrats elections. Thus, it can be said that it was Trump's team who organized the riots in Washington. As a result of which, 4 demonstrators were killed. A little later, when the assault on the Capitol had already begun, Trump wrote in social networks that the demonstrators did not break the law and went home. However, no one believed in the sincerity of such a step. Thus, there is now talk of removing Trump from office before January 20, and all social networks have blocked access to the president's pages.

Overall conclusions and recommendations:

The EUR/USD pair continued building the upward section, but the upward trend is about to end soon. At the moment, it is suggested to sell EUR/USD with targets near the level of 1.20 and 1.19 at every bearish signal of the MACD indicator. It should be noted that the wave layout of the upward trend section could be a more complicated and lengthy pattern The expected wave 5 could also end up quite extended. Therefore, it is better to wait before selling the currency pair.