The EUR/USD currency pair continued its upward move on Tuesday. Volatility exceeded 100 pips for the first time in a long while, which is a very good signal. With strong momentum, it will be easier to leave the seven-month sideways channel 1.1400–1.1830.

So, the euro is rising for a second day in a row. As soon as Donald Trump announced new trade tariffs on European Union countries, regardless of any trade agreements or previously reached deals, the dollar immediately began to fall. And we have only one question: did the market really need to wait for new tariffs to resume selling the US currency? And one more question: did anyone in the world really believe that Trump would not impose new trade tariffs?

Sometimes it seems to us that the world has forgotten that Trump was already the US president. Eight years ago, the controversial Republican showed the world what to expect. As it turned out, those were just the mild signs. Donald Trump began his second term in office at full speed, understanding that four years of a presidency is not too long. Therefore, things are not put off for long now, and the period between threats and active action is minimal.

Overall, traders continue to ignore most of the incoming information. Recall that already in 2026, the market had many reasons to sell the US dollar. US labour-market data failed once again; other macro indicators also failed to impress. Trump began the year with a military incursion into a neighbouring sovereign state, and the following week, he issued threats against Denmark and the European Union, Mexico, Colombia and Cuba. The Fed cut rates three times at recent meetings, criminal proceedings are underway against Jerome Powell, and Trump, not seeing Europe's eager willingness to hand over Greenland, unblinkingly imposed 10% tariffs. Meanwhile, panic has begun in the European Union.

It feels as if Europe acts according to some manual that clearly prescribes the rules of international politics. The fact that Trump will attack any country on the planet to extract money, territory, concessions, etc., is obvious. However, Brussels demonstrates a complete lack of understanding of what is happening. European politicians this week, as expected, shook their heads and concluded that Trump is making a mistake. Recall that last year, even refrigerators in Europe thought Trump was wrong and that such things should not be done. In the end, Ursula von der Leyen concluded an agreement with Trump that left many horrified. Presumably, the EU believed that giving Trump what he wanted would prevent further claims.

Trump struck the EU with another tariff blow despite previously reached agreements. Trump wants to obtain Greenland without war. Will the European Union respond? Or will it begin new negotiations to placate the American despot?

The average volatility of the EUR/USD pair over the last 5 trading days as of January 21 is 65 pips and is characterized as "medium." We expect the pair to move between 1.1674 and 1.1804 on Wednesday. The higher linear-regression channel is directed upward, but in fact, the daily-TF flat still continues. The CCI indicator recently formed another bullish divergence, pointing to a resumption of the uptrend. However, the key point remains the daily-TF flat.

Nearest support levels:

S1 – 1.1719

S2 – 1.1658

S3 – 1.1597

Nearest resistance levels:

R1 – 1.1780

R2 – 1.1841

Trading recommendations:

The EUR/USD pair remains below the moving average, but on all higher timeframes the uptrend persists, while the daily timeframe has been flat 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 below the moving average, one can consider small shorts on purely technical grounds, with targets at 1.1597 and 1.1536. Above the moving average line, long positions remain relevant with a target of 1.1830 (the upper line of the daily flat).

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.