Wave Analysis by InstaForex

Forex Analysis & Reviews: EUR/USD Forecast for February 28, 2025

Yesterday, the stock market experienced a decline of 1.58% in the S&P 500, while the dollar index rose by 0.83%. The yield on 5-year U.S. government bonds dropped from 4.27% on Monday to 4.05%. This market movement was triggered by Donald Trump's decision to enforce the previously announced 25% tariffs on Canada and Mexico, due to their failure to comply with a one-month corrective period aimed at curbing drug transit, as well as an additional 10% tariff on Chinese goods. The initial market shock occurred on February 20, when U.S. Secretary of Defense Pete Hegseth approved Trump's plan to cut the defense budget by 8% over five years. On that day, the S&P 500 fell by 0.43%, although the euro unexpectedly increased.

Currently, the euro faces a critical downward target at 1.0350. If this support level breaks, it could lead to a decline toward 1.0280, represented by the MACD line. Following that, we anticipate a further drop to 1.0135. The Marlin oscillator's signal line has firmly entered the downtrend territory, exerting downward pressure on the price.

On the four-hour chart, the overall trend remains bearish. The price is currently trading below both indicator lines, and the Marlin oscillator is gaining strength within the bearish zone. At the 1.0350 level, the Marlin may experience a slight slowdown in its decline; however, it is still far from the oversold zone. A brief pause might occur before attempting to reach the next significant target at 1.0280, with a correction expected from the 1.0350 level.

Analysis are provided by InstaForex.

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Forex Analysis & Reviews: EUR/USD Forecast for March 3, 2025

On Friday, the euro fell by 20 pips, but it has already surpassed that day's high this morning. However, it is likely to continue fluctuating within the range of 1.0350–1.0458 until Thursday, when the European Central Bank is expected to cut rates by 25 basis points. Even today might be challenging for the euro, as the core CPI for February is projected to decline from 2.7% YoY to 2.5% YoY, while the overall CPI is forecasted to drop from 2.5% YoY to 2.3% YoY. A decrease in inflation could strengthen expectations for a rate cut.

On the other hand, expectations for the U.S. dollar are strengthening. The Manufacturing PMI for February is anticipated to rise from 51.2 to 51.6. If U.S. traders take a more decisive stance, the euro could consolidate below the 1.0350 support level even before the European Central Bank meeting, potentially opening the way to a target of 1.0273 along the daily MACD line.

On the H4 chart, the price is showing a more pronounced sideways movement, aided by a slight divergence with the Marlin oscillator. It is possible that upcoming economic data may not be particularly favorable for the dollar. Today and tomorrow are likely to be a period of waiting.

Analysis are provided by InstaForex.

Read more: https://ifxpr.com/4ini1DX