The last trading day turned out to be favorable for the US dollar, whose price rose against its competitors. There was nothing in the economic calendar, since the statistics from the United States, Europe and the United Kingdom were not published. The only lever for emotional impact in the market was the impeachment news of the current US President, Mr. Donald Trump.
Based on the information noise on impeachment, we can see the emergence of the current news about the impeachment vote dates (15:00 Universal time). As a result, the US dollar felt speculators' local pressure, which led to a slight pullback.
What happened on the trading chart?
Let's start first by analyzing the euro/dollar pair. During the development of the correction from the peak of the medium-term upward trend of 1.2349, the quote expectedly found a pivot in the area of 1.2130 on January 6, where the support level passes from the values of December 16 and 21, 2020. This pivot point was already noted in the previous analytical review.
The rebound that followed, in turn, can be linked both from a technical point of view and a fundamental one, referring to the impeachment news.
Looking at the chart below, the correction move from the peak of 1.2349 is highlighted in red ellipse, while the rebound from the variable pivot point of 1.2130 is also highlighted in green ellipse. This indicated rebound coincides with the news of impeachment.
The pound/dollar pair, moving along a similar course of correction from the peak (1.3702) of the medium-term upward trend from January 4, reached the support area of 1.3430/1.3450. This reflects the basis of December 28 (red square on the chart).
The area served as a support in the market, which made it possible to move into the pullback stage. It is worth noting that the time interval of the rebound also coincides with the information background of the impeachment.
Trading recommendation for EUR/USD on January 12
For the economic background, we only have data on the number of open vacancies in the US labor market for November, with a forecasted decline from 6,652 thousand to 6,300 thousand. This factor may negatively affect the value of the US dollar, reflecting the weakness of the labor market in the United States.
USA 15:00 Universal time - Number of open vacancies in the JOLTS labor market (Nov.).
Analyzing the current trading chart of the EUR/USD pair, price fluctuations in a sideways amplitude can be observed, where the levels of 1.2130 and 1.2175 are used as variable borders. It can be assumed that the specified borders will hold back speculators temporarily.
But given a situation where there is a pivot point of 1.1230 and a corrective movement, you should take a wait-and-see position and then work on the breakdown of one or another border of the range.
Trading recommendation for GBP/USD on January 12
If we analyze the current trading chart of the GBP/USD pair, we can see that the pivot area of 1.3430/1.3450, where the quote came up the day before, still serves as support for market participants. This resulted in a reversal towards the level of 1.3566.
The corrective movement is still relevant in the market. The price, returning to the support area of 1.3430/1.3450, is possible. Therefore, this scenario should not be ruled out from the development.
The only exception may be holding the price higher than the level of 1.3635, which will break the component of the correction and may lead to the continuation of the medium-term upward trend or a transition to a wide side channel.