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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 13, 2024

Perhaps never before have we seen a scenario where, following a 60 basis point cut in the refinancing rate, the currency issued by the central bank making such a significant move actually rises. But that's precisely what happened yesterday. After the European Central Bank lowered the interest rate from 4.25% to 3.65%, the single currency didn't even consider a decline. On the contrary, it grew quite confidently. And this was the largest single cut in the refinancing rate in the entire history of the ECB. While it's now listed in virtually every economic calendar that this outcome was predicted, that's not entirely accurate. Right before the meeting, forecasts were pointing to a rate of 4.00%. That was changed almost after the fact. So, this large cut was an outright surprise. This raises the question of why the euro continued to rise afterward. The answer lies in the comments made by ECB President Christine Lagarde. During her press conference, she explicitly stated that the ECB is putting the monetary policy easing process on hold. In other words, no more rate cuts for now. The market, however, had expected this process to be drawn out over a more extended period. Now, the Federal Reserve will be lowering interest rates, not the ECB. This shift in expectations likely spurred the euro's rise. However, interest rates in the United States are still significantly higher than those in Europe, which is unlikely to change. The only question is the size of the interest rate disparity. This fact will continue to put pressure on the euro. Once the market recovers from the initial shock, the dollar will likely resume steadily strengthening its position.

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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 16, 2024

The market is starting to prepare for the upcoming Federal Open Market Committee meeting this Wednesday, which is causing the euro to continue strengthening its position. The anticipation centers around the market's expectation of an interest rate cut by the Federal Reserve. There are still strong expectations of a 50-basis-point cut. As a result, it may turn out that after the first rate cut in several years, the dollar could rise if the Fed lowers the key rate by only 25 bps. Until then, the dollar will likely remain under pressure and gradually lose value.

The EUR/USD pair is currently in a recovery phase following a recent corrective move. The psychological level of 1.1000 serves as support. In the four-hour chart, the RSI technical indicator moves within the buyers' area of 50/70, indicating an upward sentiment among market participants. Regarding the Alligator indicator in the same time frame, the moving average lines point upward, aligning with the price movement. Expectations and Prospects If the next stage of the euro's recovery continues amid the market's dollar sell-off, stabilizing the price above the 1.1100 mark could increase the volume of long positions. Under this scenario, the pair may move at least toward the recent local high of September. As an alternative scenario, there could be a slowdown in the recovery cycle, with the price returning to the upper area of the psychological level. The complex indicator analysis indicates an ongoing upward cycle in the short-term, intraday, and medium-term periods.

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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 17, 2024

Leading media outlets are increasingly promoting the idea of a 50-basis point cut in the U.S. rate, contributing to further weakening of the U.S. dollar. Considering that the Federal Open Market Committee meeting is tomorrow, this trend is likely to persist until the close of today's trading. However, the scale of the dollar's weakening is expected to be somewhat more modest than yesterday. The dollar will find some support from macroeconomic data. Despite the possible slowdown in retail sales growth, from 2.7% to 2.2%, the decline in industrial production of -0.3% is likely to turn into growth of 0.2%. So, two key sectors of the economy might show growth, which should provide at least some support for the dollar.

Since the start of the new trading week, the euro's recovery has accelerated, allowing it to surpass the 1.1100 level. This price movement indicates more than a 60% recovery relative to the recent corrective cycle. In the four-hour chart, the RSI technical indicator is moving in the buyers' area of 50/70, indicating a bullish market sentiment. It is worth noting that the overbought zone has already been reached. Regarding the Alligator indicator in the same time frame, the moving average lines point upward, aligning with the price movement. Expectations and Prospects The price's stabilization above 1.1100 may indicate further growth in the volume of long positions in the euro, which, from a technical analysis perspective, suggests the possibility of the price rising toward the resistance level of 1.1200. The alternative scenario considers a slowdown in the upward cycle in the form of a pullback due to the euro's local overbought condition in the short term. The complex indicator analysis indicates a sustained upward cycle in the short-term, intraday, and medium-term periods.

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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 18, 2024

If the leading U.S. media were assuring the inevitability of a 50 basis points interest rate cut on Monday, yesterday, it seemed everyone had forgotten about those reports. The same outlets casually began talking about a 25 bps cut instead. This, of course, had its effect and even allowed the dollar to start strengthening from the opening of the U.S. trading session. But in reality, it no longer matters much how big today's interest rate cut will be. The dollar has been losing ground since spring when talks about the upcoming monetary policy easing by the Federal Reserve began to intensify. The market has already priced in one or two cuts—those very 50 bps. Of course, the fact that this is the first rate cut in several years will impress the markets, and the dollar will weaken for some time. But the scale of its decline will still be minor. What's far more important is what Fed Chair Jerome Powell will say. But, based on his previous speeches, he will most likely stick to ritualistic phrases, essentially saying that future interest rate decisions will consider macroeconomic dynamics. In other words, the head of the Fed is unlikely to say anything concrete. Therefore, the market will eventually return its focus to the interest rate disparity, which has recently shifted significantly in favor of the dollar. It's quite possible that once the initial emotions subside, the dollar will start to strengthen. This process could take several months.

During its upward momentum, the EUR/USD pair nearly reached the local high of September 6, at which point the volume of long positions decreased. As a result, a pullback-stagnation occurred, fitting within the component of the upward cycle. In the four-hour chart, the RSI technical indicator exited the overbought zone during the pullback but remained in the bullish area of 50/70. Regarding the Alligator indicator in the same time frame, the moving average lines point upward, aligning with the price movement. Expectations and Prospects Price stabilization above the 1.1150 level is necessary for the next growth phase. Under this scenario, a complete recovery from the recent correction and an update to the medium-term trend's high is possible. It's important to note that today, technical analysis takes a backseat, as speculators' primary focus is on the outcome of the Fed meeting. The complex indicator analysis suggests a pullback in the short term, while indicators are geared towards an upward cycle in the intraday and medium-term periods.


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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 19, 2024


For the first time in four years, the Federal Reserve lowered its interest rates by a substantial 50 basis points. This move was driven not only by the steady slowdown in inflation but also by the U.S. central bank's concerns about the potential slide of the economy into a recession. However, what is truly surprising is the market's reaction— the dollar immediately started to rise significantly. The reason lies in the statements made by Jerome Powell. The head of the U.S. central bank promptly warned the markets not to expect the same pace of monetary policy easing to continue. According to him, the Federal Open Market Committee is considering cutting interest rates by another 50 bps by the end of this year, but this will happen gradually. With only two meetings left this year, this means 25 basis points at each meeting. However, everything will depend on macroeconomic dynamics. Given that the pace of inflation will surely slow down, there is a possibility that the central bank might only lower its interest rates once before the start of next year. This is precisely why the dollar began to strengthen, as the markets were expecting a more aggressive monetary policy easing. Today, the focus shifts to the Bank of England, which will likely set the tone for further actions by key central banks. The British central bank is expected to keep its interest rates unchanged. In the context of the Fed starting to lower its rates, such a step by the BoE would provide momentum for the pound to rise. This, in turn, would also pull up the euro via the dollar index.


The EUR/USD pair, driven by a strong flow of news and information, shows increased volatility. During this period, the price almost reached the 1.1200 mark. The upward sentiment remains undeniable despite the previous trading day's closing near the opening level. In the four-hour chart, the RSI technical indicator is moving in the buyers' zone of 50/70, indicating a bullish sentiment. Regarding the Alligator indicator in the same time frame, the moving average lines point upward, aligning with the current price movement. Expectations and Prospects For the next stage of growth, price stabilization above 1.1150 is necessary. Under this scenario, it is possible to see an update of the mid-term trend high, located around the 1.1200/1.1280 range. Comprehensive indicator analysis in the short-term and intraday periods supports a sustained upward trend.


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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 20, 2024

After the Bank of England kept its interest rates unchanged, investors finally realized that the situation in the market was changing somewhat. The number of votes in favor of lowering the key rate decreased, which means the British central bank put on pause further easing monetary policy. Not long before, the European Central Bank implemented a significant rate cut, indicating that any further reductions would occur in the more distant future. Meanwhile, the Federal Reserve is just starting its monetary policy easing journey. In other words, only the United States will be lowering interest rates in the near future, while in Europe, they will remain unchanged. This is precisely why the dollar is losing ground, and it seems this process will continue for several months.

The EUR/USD pair has almost fully recovered its value after the recent corrective cycle. Currently, the price is fluctuating around the local high of the upward trend. In the four-hour chart, the RSI technical indicator is moving in the buyers' zone of 50/70, indicating a bullish sentiment. Regarding the Alligator indicator in the same time frame, the moving average lines point upward, aligning with the price movement direction. Expectations and Prospects The price's stabilization above 1.1150 reflects a bullish sentiment among market participants. However, buyers still face resistance in the 1.1200/1.1280 area, which represents the peak of the medium-term trend. This area must be overcome to strengthen the current trend; otherwise, it could act as resistance. The complex indicator analysis indicates an upward cycle in the short-term, intraday, and medium-term periods.

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Forex Analysis & Reviews: Forecast for EUR/USD on September 23, 2024

On Friday, the euro tried for the third time to test the resistance of the target level of 1.1186 and the upper boundary of the price channel. If this continues, the resistance will eventually fall. Consolidating above this level will open the target of 1.1276. However, this will not yet signal the start of a medium-term rise, as the potential divergence with the Marlin oscillator may still take effect.

Several counter-dollar currencies have already formed such divergence. The euro can reverse without divergence, similar to what happened in November 2022 but in an upward scenario. For this to occur, the Marlin oscillator must consolidate in the downtrend territory, and the price must subsequently consolidate below the MACD line.

On the four-hour chart, Marlin is close to crossing into negative territory. If the price breaks through the support level of 1.1076, it will also mean breaking through the MACD line in this time frame. The situation remains bullish on both timeframes, so we will wait to see how events unfold. The Eurozone September Purchasing Managers' Index (PMI) will be released today. A slight weakening is expected, with the composite PMI from S&P Global forecasted to drop from 51.0 to 50.6. This upward trend may change.

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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 24, 2024

The business activity indices in Europe were expected to remain broadly unchanged, while the United States would show a significant decline. However, the outcome was somewhat different. Initially, the composite business activity index in the Eurozone dropped from 51.0 to 48.9. This decline was due to a decrease in the services activity index, from 45.8 to 44.8, and the manufacturing index, from 52.9 to 50.5, despite forecasts predicting an increase to 53.0. These figures immediately strengthened the dollar, which only slowed down after the opening of the US trading session. The composite index of business activity in the United States was expected to decline from 54.6 points to 53.0 points, but it only decreased to 54.4. This was despite the manufacturing index dropping from 47.9 to 47.0, with a forecast of 48.0. The key factor was the services activity index, which, instead of decreasing from 55.7 to 54.0, rose to 55.4. Overall, business activity is declining on both sides of the Atlantic. While this was a complete surprise in Europe, the situation in the United States is somewhat better than expected. The economic calendar is generally empty until the end of the current week. Thus, the only thing the market can rely on is media reports. The market will likely consolidate around the already achieved values if no sensational news arises.

Despite a slight pullback in the euro's exchange rate against the dollar, the quotation remains near the local high of the upward trend. In the four-hour chart, the RSI technical indicator has fallen below the 50 midpoint, indicating a retracement. However, this does not mean the sellers have broken the upward cycle. Regarding the Alligator indicator in the same time frame, the moving average lines have locally changed direction due to the pullback. Expectations and Prospects For the next phase of growth, it is necessary to stabilize the quotation above the 1.1200 mark. In this scenario, there is a high probability of surpassing the high set in July 2023, which is 1.1276. Otherwise, we can expect a range-bound movement around the current values. The complex indicator analysis indicates a retracement in the short-term and intraday periods. The indicators are oriented towards an upward trend in the medium term.


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Forex Analysis & Reviews: Overview of GBP/USD on September 25; The Pound Doesn't Care Where or When to Rise

Guess what? The GBP/USD pair continued to move upward on Tuesday. The movement was relatively weak this time, but we also warned about this yesterday. Yes, the market didn't have reasons to sell the dollar and buy the pound this time, but it didn't have them on Monday either. Nevertheless, the British currency also grew on the first trading day of the week. Let's recall that on Monday, the UK published the Purchasing Managers' Indices (PMI) for the services and manufacturing sectors, which turned out to be weaker than expected. Therefore, the pound had every reason to fall by at least 30-40 pips. And it did fall, but what's the point if it eventually rose by 80 pips without any reason? On Tuesday, there was no news from the UK or the US, yet the British currency continued its sluggish growth. Thus, we can draw an unambiguous conclusion – time passes, but the situation in the forex market doesn't change. We've been talking about the illogical upward movement since the beginning of the year because even back then, it was evident that the pound was rising much more frequently than there was positive news from the UK or negative news from the US. It's the end of September, and the pound still rises whenever and wherever it wants. You can endlessly debate that the market is "experiencing a rise in risk sentiment" or that "the market expects a divergence in Federal Reserve and Bank of England rates," but all of this is just an attempt to present wishful thinking as reality. The US dollar has been falling for two consecutive years. If the market is currently pricing in the future divergence between the Fed/BoE rates, why was the pound rising a year ago or even a year and a half ago?

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Forex Analysis & Reviews: Hot Forecast for EUR/USD on September 26, 2024

If on Tuesday the dollar weakened without any serious reasons, aside from the contrived hype stirred up by the leading American media, then yesterday it strengthened, once again defying common sense. There were no significant macroeconomic data releases, but a 4.7% drop in new home sales certainly can't support strengthening the US currency. Most likely, the market was correcting the imbalances that had arisen the day before, returning to the levels it was on Tuesday morning. In other words, the situation in the market remains unchanged, albeit accompanied by considerable volatility. Today's published data on US GDP is unlikely to have much impact, as it concerns final figures expected to merely confirm the preliminary estimates already factored in by the market. Attention can be paid to the durable goods orders, which might decrease by 0.1%. Given that the market cannot remain motionless, a decline in orders will likely lead to a symbolic weakening of the dollar.

The EUR/USD pair temporarily surpassed the 1.1200 level during market speculation, but market participants could not stabilize the quote above it. As a result, a price pullback occurred, with the pair still trading near the peak of the upward cycle. In the four-hour chart, the RSI technical indicator moves around the median level of 50, indicating a price pullback. Regarding the Alligator indicator in the same time frame, the moving average (MA) lines are intertwined, corresponding to a pullback phase. Expectations and Prospects For the next phase of growth, it's necessary to stabilize the quote above the 1.1200 mark throughout the day. In this scenario, the high set in July 2023, which stands at 1.1276, is highly probable to be updated. Otherwise, we can expect fluctuating movement around the current levels. The complex indicator analysis in short-term and intraday periods indicates a pullback.

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