EUR/USD Forecast: January 29th - February 4th
The EUR/USD remains optimistic, but after reaching a level last week not seen since April 2022, the currency pair has reverted downward.
The EUR/USD pair entered the weekend near 1.08655. This appears to be a favorable result for speculators who have maintained a bullish outlook on the currency pair. Unfortunately for day traders, the EUR/USD has also given a high level of volatility while on an upward trend, and this was on the whole show last week. The EUR/USD reached a high of around 1.093000 on Thursday before falling on Friday.
The EUR/gradual USD's rise has provided consistent optimistic signals, but chasing the Forex pair is difficult if a trader is over-leveraged and bearish reversals push them out of their positions too rapidly. The approaching week promises to deliver quick outcomes that may be dynamic once more.
The Federal Reserve of the United States will deliver its Monetary Policy Statement on Wednesday, along with a 0.25% rate rise. To round off the trading action this week, the US employment report will be announced on Friday. It is also worth noting that the Bank of England will publish its interest rate decision on Thursday.
Speculators targeted and hit the EUR/USD 1.09000 ratio, however, it was not sustained
For some bullish traders, finishing the week at the 1.08655 ratio may appear to be a failure, but perspective is crucial. The highs achieved on Thursday were not seen since April of 2022, and the EUR/capacity USD's to flirt with levels over 1.09000 has not gone ignored. The currency pair's rise will never be one-way, and it would be foolhardy to pursue purchasing positions blindly. Traders must maintain a sense of reality.
Technically, the EUR/USD stays close to the 1.09000 level, and traders betting on this level are expected to be plenty. Last week's core economic statistics in the United States indicated that growth is slowing, and consumer spending showed signals of constraint on Friday.
On Wednesday of this week, the United States Federal Reserve will be a focal point
- The Federal Reserve of the United States is likely to raise interest rates by 0.25% on Wednesday, although many financial institutions anticipate a less aggressive interest rate stance.
- If the US Federal Reserve begins to show evidence that it recognizes the US economy is slowing and says that a more dovish interest rate policy will emerge in the medium term, the EUR/USD might strengthen.
EUR/USD Weekly Outlook:
The EUR/USD speculative price range is 1.07800 to 1.09810.
Support levels in the EUR/USD have shown the potential to climb gradually. In terms of any big downward swings, the 1.08100 ratio presently appears to be a bottom rung for the currency pair. Certainly, the EUR/USD might breach this level and fall further, but from a speculative standpoint, the incremental gain in the Forex pair's worth is appealing.
However, traders should expect a high level of volatility this Wednesday, as well as a broadening of the EUR/USD range before and after the U.S. Fed's announcement. If the Fed disappoints financial institutions, the EUR/USD might find itself swiftly testing support levels.
Traders, on the other hand, are likely to expect the US Fed to declare it will be attentive to the US economy and will contemplate just raising interest rates by 0.25% increments, and that the US central bank may consider suspending rate rises in the mid-term.
If the Fed communicates that it believes the US economy is faltering, the EUR/USD will likely climb over 1.09000 and maybe sustain value above this level. Speculative positions are expected to be placed in the first few days of trading this week, and traders should ready themselves for quick price activity. If the 1.08700 level becomes a stable foundation and the 1.08900 level flirts frequently, a break of the 1.09000 level might fuel fresh bullish momentum and quickly wipe out last week's highs.