Will the already weak U.S. dollar continue to weaken? All eyes are on the direction it takes.

Will the already weak U.S. dollar continue to weaken? All eyes are on the direction it takes.

21.01.2026

In yesterday’s U.S. currency trading, the U.S. dollar remained the weakest performer, continuing the trend from the day before. The EUR/USD pair rose from 1.1632 to 1.1767, breaking through the upper resistance zone marked by the 200-period simple moving average (SMA) on the hourly chart. On the 4-hour chart, the RSI rose from 55 to 77. On the daily chart, the pair has reached a new high for the month. Since there has been no significant pullback during today’s Asian session, we will be watching for further weakness in the U.S. dollar during the European session.

European currencies rose against the yen as the German ZEW Economic Sentiment Index for January, released yesterday, came in at 59.6—a significant increase from the previous month’s 45.8 and well above the market forecast of 49.0.The EUR/JPY pair rose from 183.771 to 185.464. The 200-period simple moving average (SMA) on the hourly chart acted as a support level, causing prices to turn upward. On the 4-hour chart, the candlesticks have reached the +3σ level of the Bollinger Bands, and on the daily chart, prices have recovered to a range near the year-to-date high.

Today’s schedule includes the Westpac Leading Economic Index (Australia) at 8:30, the UK Consumer Price Index, UK Producer Price Index, and UK Retail Price Index at 16:00, remarks by ECB President Lagarde at 16:30, the UK CBI Business Survey at 20:00, the US MBA Mortgage Applications Index at 21:00, and at 22:30, Canada’sIndustrial Product Prices and Raw Materials Price Index, remarks by U.S. President Trump (Davos Forum) at 10:30 PM, pending home sales and construction spending data from the U.S. at midnight, remarks by ECB President Lagarde (Davos Forum) at 1:45 AM, and a U.S. 20-year Treasury auction at 3:00 AM. We will carefully assess the direction of the market to determine whether the U.S. dollar, which has already hit a low, will continue to weaken.

Past Market Reports

1. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

2. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

3. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

4. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

5. 13.04.2026New

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

6. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

7. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

8. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

9. 07.04.2026

   Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran

10. 06.04.2026

    Investors should be wary of sudden spikes in volatility while major markets are closed