All Eyes on Whether the U.S. Dollar, Now at Its Weakest, Will Weaken Further

All Eyes on Whether the U.S. Dollar, Now at Its Weakest, Will Weaken Further

21.01.2026

In the U.S. currency market yesterday, the U.S. dollar remained the weakest, continuing the trend from the day before yesterday. The EUR/USD pair rose from 1.1632 to 1.1767, breaking through the upper resistance zone formed by the 200-period SMA on the hourly chart. On the 4-hour chart, the RSI rose from 55 to 77.On the daily chart, the pair has hit 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 euro/yen 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, 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 Australian Westpac Leading Economic Index 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, and at 20:00, the UKCBI Business Survey, at 21:00 the U.S. MBA Mortgage Applications Index, at 22:30 Canada’s Industrial Product Prices and Raw Materials Price Index, remarks by U.S. President Trump (World Economic Forum in Davos),at 24:00: U.S. Pending Home Sales, U.S. Construction Spending; at 25:45: ECB President Lagarde’s remarks (Davos Forum); and at 27:00: U.S. 20-Year Treasury Auction.We will carefully assess the direction of the U.S. dollar, which has hit a new low, to see if it will weaken further.