(MENAFN- Daily Forex)
Ahead of the most important event for the Forex markets, the US federal Reserve announcement later today, the EUR/USD currency pair is resuming its broader downward trajectory, stabilizing around the support level of 1.0413. This move abandons the recent upward rebound gains that reached the resistance level of 1.0533, its highest in over a month. Furthermore, the performance confirms our forecast for the Euro-Dollar to sell at every upward level.
Factors affecting the EUR/USD pair today
Keep in mind that the performance of the EUR/USD pair will be influenced by the signals from the upcoming FOMC statement, as the Fed is widely expected to keep US interest rates at 4.50% and emphasize a more gradual pace of easing for the year. Meanwhile, the European Central Bank is expected to issue its decision, and the central bank is expected to cut interest rates by 0.25% while emphasizing a data-dependent approach to easing.
The US GDP report is also expected, which could affect overall market sentiment and the direction of the US dollar. Meanwhile, Economic growth is expected to slow to 2.7% in the fourth quarter compared to the previous growth figure of 3.1%. Moreover, a positive surprise could strengthen the Fed's hawkish stance to neutral.
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The euro's gains will remain cautious until investor confidence in the future of the eurozone's economic recovery returns, and this may take a long time, so beware of euro gains stock markets may rise today
According to stock trading company platforms, European stock markets may see strong performance today following better-than-expected fourth-quarter results from Dutch semiconductor equipment maker ASML, indicating strong demand for artificial intelligence-related machines. Also, concerns about rising competition between Western and Chinese artificial intelligence technologies, which led to selling earlier in the week, have begun to subside.
On the economic data front, German consumer confidence, Spanish GDP, and Italian business and consumer confidence will be released today. Also, the Swedish central bank will decide on monetary policy. In pre-market trading, futures for the Euro Stoxx 50 and Stoxx 600 indices rose 0.8% and 0.5%, respectively.
On the economic front this morning, according to the economic calendar data, the GfK Consumer Climate Index for Germany fell to -22.4 in February 2025 from -21.3 slightly in the previous period, which was below market expectations of -20. Also, economic expectations weakened (-1.6 vs 0.3 in January), and income expectations (-1.1 vs 1.4), and willingness to buy (-8.4 vs -5.4), reflecting the slow economic recovery, rising layoff rates, and factory closures.
At the same time, the propensity to save increased (8.2 vs 5.9) as the nation prepares for next month's elections. Rolf Bürkl, GfK consumer expert, said: "The German consumer climate has suffered another setback," adding that a sustained recovery remains elusive, especially with inflation rising again.
EURUSD Chart by TradingViewEUR/USD Technical Analysis Today:
According to recent trading, the EUR/USD currency pair has formed higher lows and higher highs within an uptrend channel, and the EUR/USD currency pair appears to be preparing to test support. Technically, the Fibonacci retracement tool shows additional levels where buyers may be waiting. Furthermore, the 38.2% Fibonacci retracement level at 1.0428 is near the channel bottom and the dynamic inflection point of the 100 SMA. The 50% Fibonacci retracement level at 1.0396 is near the 200 SMA support, and then the 61.8% Fibonacci retracement level at 1.0364.
As for the moving averages, the 100 SMA is above the 200 SMA to confirm that the near-term trend is in an attempt to bounce higher or that support is likely to hold rather than break. Moreover, the gap between the indicators is widening to reflect increasing bullish momentum, so EUR/USD could recover to a high of 1.0532 or the channel high closer to 1.0600 if the Fibonacci lines hold.
Meanwhile, the Stochastic indicator is heading lower to show that the bears are in control, but the oscillator is also approaching the oversold zone to reflect exhaustion. Concurrently, the turn higher suggests that the uptrend may resume with the bulls in control. Also, the RSI is approaching the oversold zone to suggest that the sellers may take advantage of the breakout soon and allow the buyers to return.
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