Overview of the EUR/USD pair. January 20. Trump has played at being a "peacemaker"

[Ben Graham]

The EUR/USD currency pair traded quietly, peacefully, and calmly on Monday, showing no reaction to events unfolding in 2026. Recall that in the first, incomplete three weeks of the current year, so many events have occurred globally that EUR/USD could easily already be trading above 1.2000. However, the flat on the daily TF remains relevant, volatility remains low, and the market accordingly pays almost no attention to the news flow.

Over the weekend, it became known that Donald Trump decided to introduce new trade tariffs not only against all states that have trade relations with Iran, but also against all countries that do not approve of his desire to take Greenland. Eight EU countries fell into this list, and we can once again see that no agreements with Trump work. Last year, Brussels and Washington agreed on a trade deal that, according to many experts, is absolutely disadvantageous for the EU. In other words, Trump got the best possible deal thanks to the softness of European politicians. As it turned out in January 2026, having a trade deal absolutely does not guarantee the absence of future claims. Previously, Trump accused the EU of unfair treatment of the US, and now, of having no legal rights to Greenland.

Apparently, the US president assumed the following: he publicly asserted his claim to Greenland and immediately demanded that all the island's inhabitants become Americans, and that all other states recognise that the island now belongs to the US. Presumably, the White House leader thinks that geopolitical issues are resolved that way in the 21st century. Well, this is another very interesting and notable situation. If the EU attempts to negotiate with Trump again, it will step on the same rake as last year.

By the way, the trade agreement between the US and China has not been ratified or signed. As with China and with the UK. Thus, it is quite possible that Trump will have no deals with any of the largest trading partners. Recall that Trump did not even have time to sign trade agreements with "friendly Britain", "tenderly loved China," and the "partnering EU" before he imposed new tariffs on them. The UK ended up on the list of rogues who do not wish to recognize Trump's claims to Greenland. China may receive new tariffs for doing business with Iran. The EU, because it contains several "bad apples" like the UK.

Trump himself has already explained his desire to acquire Greenland. According to him, Denmark has no rights to the island, and he no longer wants to be a peacemaker because he was not awarded the Nobel Peace Prize "for ending eight or more wars." And Norway, by the way, which also received its share of tariffs, is to blame. Thus, the White House leader took offense, and now Europe is in for trouble.

The average volatility of the EUR/USD currency pair over the last 5 trading days as of January 20 is 47 pips and is characterized as "low." We expect the pair to move between 1.1597 and 1.1690 on Tuesday. The upper linear regression channel is pointing upward, but the daily TF is still flat. The CCI indicator recently formed another "bullish" divergence, which again points to a resumption of the uptrend. However, the key point remains the flat on the daily TF.

Nearest support levels:

S1 – 1.1597

S2 – 1.1536

S3 – 1.1475

Nearest resistance levels:

R1 – 1.1658

R2 – 1.1719

R3 – 1.1780

Trading recommendations:

The EUR/USD pair remains below the moving average, but on all higher TFs the uptrend persists, while on the daily TF the flat has continued for seven months. The global fundamental backdrop still matters greatly to the market, and it remains negative for the dollar. Over the past six months, the dollar has occasionally shown weak gains, but exclusively within the sideways channel. It has no fundamental basis for long-term strengthening. With the price located below the moving average, small shorts with targets at 1.1597 and 1.1536 can be considered on purely technical grounds. Above the moving average, long positions remain relevant with a target of 1.1830 (the upper line of the flat on the daily TF), which has already effectively been tested and not overcome.

Explanations of the illustrations:

• Linear regression channels help determine the current trend. If both are directed the same way, the trend is strong.
• The moving average line (settings 20,0, smoothed) indicates the short-term trend and the direction in which trading should proceed.
• Murray levels are target levels for moves and corrections.
• Volatility levels (red lines) indicate the likely price channel in which the pair will trade over the next 24 hours based on current volatility.
• CCI indicator — its entry into oversold territory (below -250) or overbought territory (above +250) signals an approaching trend reversal.

The material has been provided by InstaForex Company - www.instaforex.com