Currency pair Euro/Dollar EUR/USD continues to move as part of growth and a bullish channel. Moving averages indicate the presence of a short-term bullish trend for the pair. Prices have gone up from the area between the signal lines, which indicates pressure from buyers of the European currency and a potential continuation of the growth of asset quotes already from current levels. At the time of the publication of the forecast, the EUR/USD exchange rate is 1.0875. As part of the Forex forecast for January 25, 2023, we should expect an attempt to develop a price increase and test the resistance level, which is located on the pair near the area of 1.0925. Further, a rebound in prices down and the continuation of the fall of the Euro/Dollar currency pair. The potential target of such a movement on FOREX is the area below the level of 1.0685.
EUR/USD Forecast January 25, 2023
An additional signal in favor of a decrease in EUR/USD quotes tomorrow will be a rebound from the upper limit of the bullish channel. The second signal in favor of this option will be a rebound from the resistance line on the relative strength index (RSI). Cancellation of the option of falling quotes of the Euro/Dollar currency pair will be a strong growth and a breakdown of the level of 1.0995. This will indicate a breakdown of the resistance area and continued growth to the area at the level of 1.1275. It is worth waiting for confirmation of the fall in the EUR/USD currency pair with a breakdown of the support level and closing the price below the level of 1.0755, which will indicate a breakdown of the lower limit of the bullish channel.
Now market participants are trying to understand whether the ECB is ready to raise the rate by 50 basis points at once at a meeting on February 2, 2023 from 2.5% to 3%. On the one hand, consumer inflation fell below 10% in December last year. Therefore, we can say that the measures taken by the ECB are already working and it is not worth further raising the rate, on the other hand, the head of the central bank, Christine Lagarde, constantly says that the goal of monetary policy is to reduce inflation to 2%. Moreover, she urges other banks not to stop raising rates, even despite the past peak of inflation. Therefore, it is likely that the current growth of the EUR/USD pair is demonstrated due to expectations of an increase in the ECB rate in February by 0.5% immediately and even at the next meeting also by 0.5%. But as soon as there are signs of the completion of the rate hike cycle, this will indicate a reversal of the current movement in the Euro/Dollar pair.
EUR/USD Forecast January 25, 2023 suggests an attempt to develop a correction in the pair and test the resistance area near the level of 1.0925. Where should we consider a price rebound down and an attempt to continue the fall of the currency pair in the market to the area below the level of 1.0685. The test of the trend line on the Relative Strength Index (RSI) will come out in favor of the instrument’s decline in the Forex market. Cancellation of the option of falling the EUR/USD pair will be a strong growth in quotes and a breakdown of the level of 1.0995. This will indicate a breakdown of the resistance area and continued growth of the Forex currency pair to the area above the level of 1.1275.
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