Jan 02, 2025 (MENAFN via COMTEX) --
(MENAFN - Daily Forex) The EUR/USD remains within the lower elements of its mid and long-term price range as nervous behavioral sentiment has set the stage for an intriguing speculative Forex battle in January.
The EUR/USD is around the 1.04120 mark as of this writing. The New Year's holiday is about to kickoff, and many financial institutions which have not been fully operational since early last week will not return to full action until next. The USD/EUR in the meantime continues to occupy lower price values it has not traded since November of 2022.
The ECB and U.S Fed both cut their interest rates by 0.25 in December, these moves were already factored into the trading of the EUR/USD. What was not fully factored in many cases was the rather aggressive stance by the U.S central bank, which said in essence that it will now become more cautious regarding the potential of further interest rate cuts. The EUR/USD was trading around 1.05000 mark on the 18th of December, after the Fed's FOMC Statement the EUR/USD suddenly was near the 1.03450 on the 19th Prices and Fair Market Value for the Meantime
After hitting the lows on the 19th of December, the EUR/USD actually began to incrementally rise. No, the currency pair didn't see a sustained buying trend, but the price of the EUR/USD did start to produce equilibrium. The calmer price in the EUR/USD the past week has happened during the midst of the Christmas season and the coming New Year's holiday, but it is a sign that perhaps financial institutions think the worst of the selling in the EUR/USD has been completed.
Looking for a strong buying surge to suddenly emerge seems unwise at this point in the EUR/USD, but the ability of the currency pair to start showing signs of support near the 1.04000 level this past week does correlate technically to lows seen in the last week of November. Could the 1.04000 mark be seen as a level that large traders think is oversold territory in the EUR/USD?Return of Full Volume and Jobs Numbers Next Week
Financial institutions will certainly be a bit wary as they step back into their offices early next week. Trading will take place this Thursday and Friday, but it will likely be limited in scope. If the EUR/USD remains above the 1.04000 level going into next week it will set the stage for an immediate test of behavioral sentiment.
The U.S will release its Non-Farm Employment Change numbers next Friday on the 10th of January and this will be interesting and effect the EUR/USD. However, the vast amount of sentiment now surrounding the USD still concerns nervousness regarding President-elect Trump who will take power in three weeks. And also interpretations regarding future Fed interest rate policy is unclear for financial houses, because even inside the Federal Reserve they are nervous about mid-term economic outlook. A cautious wait and see approach by the Fed will likely equate into a wait and see approach by financial institutions. Meaning a sudden strong move higher in the EUR/USD over the next couple of weeks is unlikely to be seen.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money EUR/USD Outlook for January 2025:
Speculative price range for EUR/USD is 1.03380 to 1.06100
The EUR/USD has produced a significant downwards trend since the end of September. The price movement in December was certainly lower, but the velocity of the drop certainly didn't have the same power as seen in the previous two months. This suggests that financial institutions now believe the EUR/USD has found equilibrium under the present Forex conditions.
However, the storm caused by nervous behavioral sentiment is not fully over and some strong winds may remain problematic if produced. The EUR/USD seems to have rather solid support around the 1.04000 ratio, but lower prices were seen in December. Traders looking for upside cannot be blamed, but they do not have much of a reason to look for sustained upwards traction quite yet. The return of full trading volume early next week will be a good barometer of existing sentiment and should be watched for clues.
EURUSD Chart by TradingView
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