It has been a solid week for the Greenback, with values rising across the majors. For the EUR/USD, forex players have sent rates south, bringing a key Fibonacci support level into play. With only a modest U.S. economic calendar on tap for today, it looks like traders are beginning to favor the dollar to kick-off 2021.

All in all, it was a quiet morning for economic releases. Here’s a quick look at a few of the more notable stats:

Event                                                           Actual                Previous

Redbook MoM (Jan. 9)                               -2.6%                       0.5%

Redbook YoY (Jan. 9)                                   2.1%                       5.5%

JOLTS Job Openings (Nov.)                       6.527M                   6.632M

To sum up, these figures don’t look good. The retail sector appears to have taken a short-term hit as has American employment. In addition to these reports, the NFIB Business Optimism Index (Dec.) came in at 95.9, well below November’s 101.4. So, it looks like many business operators are bracing themselves for a rough 2021.

Today has been extremely tight for the EUR/USD. Let’s dig into the weekly technicals and take a look at a key Fibonacci support level.

EUR/USD Challenges The 1.2100 Level

Although it’s only Tuesday, the EUR/USD is in a position to post rare back-to-back losing weeks. If rates continue to slide, an important intermediate-term support level will come into play.

Here are a few levels to watch for the remainder of the week:

• Resistance(1): Spike High, 1.2349
• Support(1): 38% Macro Wave Retracement, 1.2064

Bottom Line: While today has been a quiet session on the forex, things are due to heat up in the coming 24 hours. A slew of inflation numbers is due out during Wednesday’s U.S. premarket hours, which will certainly impact USD sentiment. If they outperform expectations, the EUR/USD will be poised to test downside support.

As long as the Spike High remains intact, I’ll have buy orders in the queue from 1.2069. With an initial stop loss at 1.2044, this trade produces 25 pips on a standard 1:1 risk vs reward ratio.