EUR/USD Forecast Today 31/01: Stuck In A Range (Video)

(MENAFN- Daily Forex)

• The euro has gone back and forth pretty significantly during the trading session on Thursday, as we have seen a lot of noise, mainly due to the idea of the ECB out there cutting rates.
• The noise around the press conference kind of left people wondering if they are really going to continue to cut or are they in a wait and see mode? And they may very well be in a wait and see mode.

One thing is for sure, the Jerome Powell press conference the previous day did not help this situation. So, I think we're settling into a trading range in between the 1.05 level and the 1.03 level below. All things being equal, this is a market that I prefer to be short of instead of long, but I also recognize that it's not always going to be moving. And right now, it's just not moving. It's a lot of back and forth Brownian motion.

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I like the idea of fading a short-term rally anywhere near the 1.05 level that shows signs of exhaustion and that resistance extends all the way to the 1.06 level. If we were to break down below the 1.03 level, then it opens up the possibility of 1.02 and then maybe even lower than that down to the parity level, which I do think we get to sooner or later, because despite the fact that the Fed really didn't do much, there is a very real world in which the Federal Reserve does not cut interest rates at all in 2025. At this point in time, I think it's going to come down to European data, but for what it's worth, the advanced GDP numbers in the United States came in cooler than anticipated. So that's part of the confusion as well.

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