empty
28.01.2025 01:33 PM
EUR/USD: January 28. The Market Prepares for ECB and FOMC Meetings

On Monday, the EUR/USD pair reversed near the 127.2% corrective level at 1.0507 in favor of the US dollar and fell toward the 100.0% corrective level at 1.0437. A rebound from this level could signal a reversal in favor of the euro and a renewed rise within the upward channel toward the 1.0507 level. Conversely, a consolidation below 1.0437 would increase the likelihood of continued decline.

This image is no longer relevant

The wave structure remains clear. The last completed downward wave broke the low of the previous wave, while the most recent (still incomplete) upward wave has broken through the last two peaks. This indicates that the bearish trend is considered completed. In the near term, a new downward wave may begin to form, but for the bears to initiate a new trend, they must push the pair back toward the 1.0179 level. Alternatively, they could form a more complex wave structure to regain control.

On Monday, the economic news flow was nearly absent. ECB President Christine Lagarde delivered a new speech, but she focused more on the independence of central banks rather than on monetary policy or interest rates. As a result, her remarks failed to provoke a reaction from traders—and likely weren't intended to. Meanwhile, traders are already in a wait-and-see mode ahead of two major central bank meetings. Tomorrow evening, the results of the FOMC meeting will be announced, followed by the ECB meeting on Thursday. In my opinion, both events could support bearish traders, though it is impossible to predict this with certainty. If the market senses a dovish shift in Jerome Powell's rhetoric, it could be detrimental to the US dollar. While I don't believe the dollar will remain under pressure throughout 2025, the market is currently anticipating a maximum of two rate cuts. Should Powell indicate the possibility of more substantial cuts, this could cause significant disappointment among dollar bulls. Graphically, the dollar may see strong growth if the pair closes below the ascending channel.

This image is no longer relevant

On the 4-hour chart, the pair consolidated above the 127.2% corrective level at 1.0436. This suggests that the upward movement may continue toward the next Fibonacci level of 100.0% at 1.0603. The euro has also broken out of the downward trend channel. While the trend is gradually shifting to bullish, it remains uncertain how long this trend will last. A bearish divergence in the CCI indicator suggests a potential decline in the near term, but the bears have yet to achieve a close below 1.0436.

Commitments of Traders (COT) Report

This image is no longer relevant

During the last reporting week, professional traders opened 4,905 long positions and 6,994 short positions. The sentiment of the Non-commercial group remains bearish, suggesting the potential for further declines in the pair. The total number of long positions held by speculators now stands at 167,000, compared to 230,000 short positions.

For eighteen consecutive weeks, major players have been selling the euro, indicating a bearish trend without exceptions. Occasionally, bulls dominate during specific weeks, but these instances are more of an anomaly. The primary driver of dollar weakness—the market's expectation of dovish FOMC policy—has already been priced in. While new reasons to sell the dollar could emerge over time, the likelihood of its recovery remains higher. Chart analysis also supports the continuation of the long-term bearish trend. As a result, I expect the EUR/USD pair to continue its decline.

News Calendar for the US and Eurozone:

  • US: Durable Goods Orders (13:30 UTC).
  • Eurozone: ECB President Christine Lagarde Speech (17:00 UTC).

On January 28, the economic calendar includes another Lagarde speech and a key US report. The overall impact of the news on market sentiment today is expected to be moderate.

EUR/USD Forecast and Recommendations:

  • Sell Opportunities: Consider selling the pair after a consolidation below the upward trend channel on the hourly chart. The likelihood of a long-term trend shift to bullish remains high.
  • Buy Opportunities: Buying is possible today on a rebound from the 1.0437 level on the hourly chart, with a target of 1.0507.

Fibonacci Levels:

  • Hourly Chart: 1.0437–1.0179.
  • 4-Hour Chart: 1.0603–1.1214.
Samir Klishi,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Chancy Deposit
    Deposit your account with $3,000 and get $1000 more!
    In February we raffle $1000 within the Chancy Deposit campaign!
    Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.
    JOIN CONTEST

Recommended Stories

Forex forecast 27/02/2025: EUR/USD, USD/JPY, USDX and Bitcoin

Useful links: My other articles are available in this section InstaForex course for beginners Popular Analytics Open trading account Important: The begginers in forex trading need to be very careful

Sebastian Seliga 12:14 2025-02-27 UTC+2

EUR/USD: February 27th. Trump Announced 25% Tariffs on EU Goods

On Wednesday, the EUR/USD pair made a new rise into the resistance zone of 1.0526–1.0533, then reversed in favor of the US dollar, resulting in a decline back

Samir Klishi 11:14 2025-02-27 UTC+2

Indicator Analysis – Daily Overview for GBP/USD on February 27, 2025

Trend Analysis (Figure 1) On Thursday, from the 1.2672 level (yesterday's daily close), the market may begin a downward movement, targeting 1.2637 – the 14.6% retracement level (red dashed line)

Stefan Doll 10:39 2025-02-27 UTC+2

Indicator Analysis for February 27, 2025 – EUR/USD Currency Pair

Trend Analysis (Figure 1) On Thursday, from the level of 1.0483 (yesterday's daily close), the market may continue its downward movement, targeting 1.0453 – the 23.6% retracement level (red dashed

Stefan Doll 10:34 2025-02-27 UTC+2

Forecast for GBP/USD on February 27, 2025

On the hourly chart, the GBP/USD pair rebounded from the 76.4% retracement level at 1.2642 on Wednesday and surged toward 1.2709. The move was executed perfectly, and a rejection from

Samir Klishi 09:54 2025-02-27 UTC+2

Technical Analysis of Daily Price Movement EUR/JPY Cross Currency Pairs, Thursday February 27, 2025.

When seeing on the daily chart, the EUR/JPY cross currency pair appears to be moving below the EMA (21) which has a decreasing slope, especially with the appearance of Convergence

Arief Makmur 07:40 2025-02-27 UTC+2

Technical Analysis of Daily Price Movement of S&P 500 Index, Thursday February 27, 2025.

From what is seen on the daily chart of the S&P500 index, it appears that the Stochastic Oscillator indicator is already at the Oversold level with a BUY Crossing condition

Arief Makmur 07:40 2025-02-27 UTC+2

EUR/USD Forecast for February 27, 2025

The potential for growth in the euro and other currencies is diminishing with each passing day. Yesterday, the Dow Jones fell by 0.43%, oil decreased by 0.17%, and Bitcoin dropped

Laurie Bailey 04:04 2025-02-27 UTC+2

GBP/USD Forecast for February 27, 2025

The British pound has reached its target resistance level at 1.2708, but this movement has exhausted its momentum. The signal line of the Marlin oscillator on the daily timeframe

Laurie Bailey 04:04 2025-02-27 UTC+2

AUD/USD Forecast for February 27, 2025

On the daily chart, the Marlin oscillator is declining sharply and has already entered negative territory. This indicates a potential medium-term decline or a deep correction. The Australian dollar experienced

Laurie Bailey 04:04 2025-02-27 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.