EUR/USD Analysis Today 15/01: Temporary Halt (Chart)

2025-01-16 12:27:38

(MENAFN- Daily Forex)

For the second consecutive trading day, the EUR/USD currency pair has attempted to halt its recent sharp decline, which extended to a low of 1.0177, the lowest level for the currency pair in over two years.
Stability is cautious until the announcement of US inflation figures, which will strongly affect expectations for the future policies of the US Federal Reserve under Trump.

Central Bank Policies Impact Exchange Rates

According to recent trades, investors in the $13 trillion high-grade corporate bond market are focusing on an unprecedented divergence between expected US and European monetary policy paths. US Treasury yields are likely to outperform their European counterparts as the European Central Bank is still expected to deliver several interest rates cuts this year, while the Federal Reserve is seen keeping US interest rates higher for longer, according to some fund managers.

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This divergence has not been seen early in the year for as long as Bloomberg has tracked interest rate expectations for the US Federal Reserve, the European Central Bank, and the Bank of England. The only notable divergence at the beginning of the year was recorded in 2023, when traders were pricing in rising interest rates – a backdrop typically associated with falling bond prices – rather than cuts.

Also, the divergence between the policies of the European Central Bank and the Federal Reserve weighs heavily on the euro-dollar exchange rate Rate Expectations for 2025

Investors and markets expect the European Central Bank to cut interest rates by 25 basis points more than three times by the end of 2025, even after they lowered their expectations in recent days. In contrast, they expect only one cut from the US Federal Reserve after US jobs data showed that the US labor market remains strong. According to officials, the European Central Bank should continue to cut interest rates, regardless of what the US Federal Reserve does.

In general, market expectations for central bank cuts can certainly change quickly with the release of new economic data. At the beginning of December 2024, traders were pricing in more than three cuts by the Federal Reserve in 2025 Tips:

Dear follower of the TradersUp website, the euro-dollar is still on its way to parity. So, be careful, do not take risks , and always monitor the factors affecting the performance of the currency pair/USD Technical Analysis Today:

Dear reader, there is no change in my technical outlook for the EUR/USD pai . The overall trend remains bearish, and the recent rebound is temporary. Investors are awaiting important US economic events. Currently, the closest support levels for the euro dollar are 1.0220, 1.0170, and 1.0080. technically , these levels are sufficient to push technical indicators towards oversold levels. The Relative Strength Index and the MACD are in the bearish zone. Furthermore, we still recommend selling the euro dollar at every opportunity.

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