Forex Forecast: 29 January – 2 February 2024 for MT4 MT5

Last week, our technical indicators suggested going Long at or below 1.09219, setting a Stop Loss at 1.07908, and going Short at or above 1.09759, setting a Stop Loss at 1.11395.

This week, the EURUSD price range was 1.0933 high, set yesterday, Wednesday, and 1.0870 low set today. So, on Monday, we could have bought the currency pair at 1.0880, selling it on an intraday trading at 1.0910, for 0.28% profit. Tuesday, we could have bought it at 1.0822, selling it on an intraday trading at 1.0916, for 0.87% profit. Wednesday, we could have bought it at 1.0846, selling it on an intraday trading at 1.0932, for 0.79% profit. Thursday, we could have bought it at 1.0871, selling it on an intraday trading at 1.0899, for an extra 0.26% ROI.

 Fundamental Overview

EURUSD gathered bullish momentum and advanced to the 1.0930 area on Wednesday. With the US Dollar (USD) staging a rebound later in the day, the pair erased a large portion of its daily gains and returned below 1.0900. Investors await the European Central Bank’s (ECB) policy announcements and high-tier data releases from the US.

Although the Composite PMI from the Euro area showed that the business activity in the private sector continued to contract in early January, the Manufacturing PMI recovered unexpectedly and helped the Euro find demand. Moreover, the improving risk mood made it difficult for the USD to stay resilient against its rivals. Nevertheless, upbeat PMI readings from the US supported the USD and forced EURUSD to turn south later in the American session.

The ECB is widely expected to leave key rates unchanged following the first policy meeting of the year. In case the policy statement, or ECB President Christine Lagarde, adopts a cautious tone regarding the inflation outlook and pushes back against market expectations for a rate cut this spring, the Euro could gather strength against its rivals. On the other hand, a dovish surprise, with Lagarde voicing concerns over the worsening growth outlook and opening the door to a reduction in key rates before June, could weigh heavily on EUR/USD.

Meanwhile, the US Bureau of Economic Analysis will release the first estimate of the annualized real Gross Domestic Product (GDP) growth for the fourth quarter. Markets expect the economy to expand by 2% following the 4.9% recorded in the previous quarter. A disappointing GDP print, at or below 1.5%, could trigger a USD selloff, while a reading at or slightly above the market consensus could support the USD.

It might be risky to bet on a steady directional movement in EURUSD based on the ECB event or the US GDP data. The pair’s volatility is likely to rise until the dust settles in the late American session.

Technical Analysis

EURUSD holds steady 1.0900 ahead of ECB.

The currency pair is trading in a narrow band at around 1.0900 on Thursday as investors move to the sidelines ahead of the European Central Bank’s policy announcements. The US economic docket will feature Q4 GDP data alongside December Durable Goods Orders.

EURUSD faces strong resistance in the 1.0920-1.0930 area, where the 100-period and the 200-period Simple Moving Averages (SMA) on the above 4-hour chart are located. Above this hurdle, 1.0960 (Fibonacci 23.6% retracement of the latest uptrend) aligns as next resistance ahead of 1.1000 (psychological level, static level).

On the downside, supports could be seen at 1.0865 (Fibonacci 38.2% retracement, 1.0830 (static level) and 1.0800 (psychological level.

For the next week, The currency pair is breaking the trend support, testing the low and forming a correction. For the market, from a technical point of view, the target of 1.0756 has appeared. The currency pair is likely to test the resistance at 1.0888 – 1.095, before further falling to the range support.

Resistance levels are at 1.0888 and 1.0950.

Support levels are at  1.083 and 1.0756.

Correction after a trend change is a standard formation. The price can test the area in the format of a false breakout and after maintaining the liquidity to direct the price to a new target.

Hence, our technical analysis is suggesting going Long at or below 1.0890, setting a Stop Loss at 1.0840, and going Short at or above 1.08930, setting a Stop Loss at 1.10.

As of 13:00 PM (GMT+1), the EURUSD was trading at 1.08889.

EUR to USD forecast for tomorrow Euro to US Dollar forecast on Friday, January, 26: exchange rate 1.092 US Dollars, maximum 1.108, minimum 1.076. EUR to USD forecast on Monday, January, 29: exchange rate 1.089 US Dollars, maximum 1.105, minimum 1.073. Euro to US Dollar forecast on Tuesday, January, 30: exchange rate 1.088 US Dollars, maximum 1.104, minimum 1.072. EUR to USD forecast on Wednesday, January, 31: exchange rate 1.090 US Dollars, maximum 1.106, minimum 1.074.

In 1 week, Euro to US Dollar forecast on Thursday, February, 1: exchange rate 1.089 US Dollars, maximum 1.105, minimum 1.073. EUR to USD forecast on Friday, February, 2: exchange rate 1.090 US Dollars, maximum 1.106, minimum 1.074. Euro to US Dollar forecast on Monday, February, 5: exchange rate 1.083 US Dollars, maximum 1.099, minimum 1.067. EUR to USD forecast on Tuesday, February, 6: exchange rate 1.083 US Dollars, maximum 1.099, minimum 1.067. Euro to US Dollar forecast on Wednesday, February, 7: exchange rate 1.081 US Dollars, maximum 1.097, minimum 1.065.

Until next article, wishing all of you wealthy trading!

 

 

 

Disclosures: The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any interests in the EUR/USD or any other securities. This overview may include or be based in part on projections, valuations, estimates and other financial data supplied by third parties, which has not been verified by Pedro Ferreira. Any information regarding projected or estimated investment returns are estimates only and should not be considered indicative of the actual results that may be realized or predictive of the performance of the EUR/USD or any underlying security.  Further, Pedro Ferreira is not long or short in the currency pair. Past investment results of any underlying managers should not be viewed as indicative of future performance of the EUR/USD.

 

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