Start Trading Now Get Started
Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

EUR/USD Weekly Forecast: Reactive Movements as Traders Express More Concerns

By Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

After climbing to around the 1.05300 level early on Monday of last week, the EUR/USD began to see buyer remorse hit the currency pair. As the Federal Reserve announced it would remain cautious on Wednesday of last week the EUR/USD did touch the 1.03800 vicinity.

EUR/USD Weekly Forecast 02/02: More Concerns (Chart)

When the ECB lowered its interest rate as expected on Thursday the EUR/USD climbed momentarily because an anticipated action was proven correct and touched the 1.04700 ratio momentarily. Then reality once again began to cast a shadow over financial institutions.

Top Forex Brokers

1
Get Started 74% of retail CFD accounts lose money Read Review

Behavioral sentiment remains fragile regarding the EUR and other major currencies paired against the USD. The fact that the European Central Bank said they will now take a cautious approach to interest rate policy on Thursday after cutting their Main Refinancing Rate did not create positive sentiment for traders – the EUR did not make friends. What it showed financial institutions who are nervous and upset about weak European Union economic conditions, is that the ECB will try to dance in step with the U.S Fed and this caused a selling backlash of the EUR/USD.

1.04000 Level Falters and Nervous Sentiment

The U.S will release jobs numbers this coming Friday, but the fact that financial institutions continue to have a negative outlook regarding E.U economic data and the notion that the ECB doesn’t believe it has to cut interest rates further is causing headwinds for the EUR/USD. Technical traders should watch the 1.04000 level as a barometer, the ability to fall below this level and go into this weekend well below the ratio is not a good sign.

The EUR/USD was trading at lows that consistently tested the 1.03000 level in the second and third week of January. Closing at the week’s low this Friday and news about tariffs about to be introduced to Canada, Mexico and China will not make Forex traders feel more comfortable. The EUR/USD may not feel like it should be hit by tariff news in the minds of traders, but behavioral sentiment in Forex may continue to make USD centric strength based on risk adverse conditions remain active.

Last Week’s Jump Higher and Speculation

Early trading last week in the EUR/USD showed that may financial institutions believe the currency pair was in oversold territory, early buying and the ability to challenge the 1.05000 level was important. However, bullish bets on the EUR/USD quickly vanished as concerns about the Federal Reserve and European Central Bank clearly showed central banks remain cautious about their outlooks too.

  • President Trump and his ability to be taken serious regarding his treats will get another early test tomorrow and Tuesday.
  • Day traders need to monitor developing news today and into early this week to see how rhetoric turns into action, and potential repercussions.
  • While the idea that calmer heads should win the day is a normal optimistic viewpoint, the opportunity for volatile and reactive conditions to flourish on Monday and Tuesday in the EUR/USD are a legitimate threat.

EUR/USD Weekly Outlook:

Speculative price range for EUR/USD is 1.02700 to 1.04300

The ability to go into this weekend at its lows for the week is a reason for concern regarding the EUR/USD. While bullish traders may believe the currency pair is oversold, betting when the turnaround higher is going to unfold and become sustained is still a gamble. Traders buying the EUR/USD early last week were likely happy to see the 1.05000 level penetrated higher, but it quickly vanished. Trading tomorrow and Tuesday will be affected by behavioral sentiment in a major way and volatility should be anticipated.

If trading in the EUR/USD sees sustained value below the 1.03700 level this could be a bearish signal. Until the 1.04000 level is penetrated higher, financial institutions will likely remain cautious regarding any attempts to get too far ahead with betting on a stronger EUR for their cash forward commercial positions. If news regarding the tariffs gets louder late today and early tomorrow, the EUR/USD may turn reactive and test lower depths near-term.

Ready to trade our weekly Forex forecast? Here’s a list of some of the top forex brokers in Europe to check out.

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

Most Visited Forex Broker Reviews