Trade Idea Week 20 Jan 2025: EURUSD

Bullish Thesis

Key Drivers:
The EUR/USD remains in a long-term bearish trend in the 4-hour timeframe, characterised by lower highs and lower lows. However, recent price action shows signs of consolidation around a critical support zone near 1.0250–1.0280, presenting opportunities for both upward retracements and continued downward moves.

Indicators like the MACD suggest weakening bearish momentum, while the ADX shows a weak trend environment, implying traders would focus on key levels for directional triggers.

Eurozone Economic Data:

1. Improved PMI readings (forecasted above 50 for services) may signal resilience in the Eurozone economy, potentially boosting EUR sentiment.
   
2. ECB President Lagarde's Speech: Any hints of future hawkish monetary policy could support the EUR.
   

Entry: 1.0280
Target TP1: 1.0320
Extended Target: 1.0340 (Weak High from 4-hour chart)
Stop Loss: Below 1.0250 to protect against a breakdown of support.
Risk/Reward: 1:2

Bearish Thesis

Key Drivers:

1. 
   The long-term bearish trend remains dominant, making the 1.0340–1.0380 resistance zone a strong candidate for selling opportunities. Price action in this area aligns with the broader trend, and bearish rejections are likely to signal further downside.
   
   Entry: Between 1.0320–1.0340
   Target TP1: 1.0280 (short-term support)
   Extended Target: 1.0250 (next demand zone on higher timeframe)
   Stop Loss: Below Above 1.0360 to guard against a breakout above the strong resistance.
   Risk/Reward: 1:2
   
   Key Events:
   
   Tuesday (Jan 21):
   
   • German ZEW Sentiment Data: Monitor the release for unexpected positive or negative surprises.
     
   • UK Employment Data: Indirect EUR movements may occur due to the EUR/GBP pair correlation.
     
   • Wednesday
     
   
   (Jan 22):
   
   • ECB President Lagarde's speech. Hawkish tones could favor the bull thesis, while dovish comments could strengthen the bear thesis.
     
   
   
   Trade Ideas are for informational purposes only.