Wave Analysis by InstaForex

Forex Analysis & Reviews: Forecast for EUR/USD on January 13, 2025

As anticipated, U.S. employment data exceeded expectations, leading to a 0.44% strengthening of the dollar index, while the euro declined by 52 pips.

The price has broken through the intermediate level at 1.0250; however, a divergence with the Marlin oscillator is beginning to form on the daily chart. This indicates that the support level at 1.0135 may only be reached after breaking Friday's low of 1.0214. The situation for bears is further complicated by the fact that Friday's price action accurately tested the embedded line of the weekly timeframe price channel.

Further movement toward the next target at 0.9920 (highlighted by the red line of the price channel) is only possible if the price consolidates below last week's low of 1.0214. The intermediate level has now been updated to 1.0214, and the market is waiting for further developments. A correction toward the 1.0350 resistance level is also a possibility.

On the H4 timeframe, a divergence is visible. The price is currently moving within the 1.0214 range with a slight bullish bias. However, upward movement may be capped by the MACD line at 1.0295. If this resistance is breached, the next target will be 1.0350.

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Forex Analysis & Reviews: Forecast for EUR/USD on January 14, 2025

The euro failed to overcome the support on the first attempt on the weekly chart. We hadn't expected such a bold move from the bears.

Currently, the price is undergoing an upward correction. Convergence on the daily chart has strengthened, and we are awaiting the conclusion of the consolidation phase.

If the price consolidates below the trendline on the weekly chart at 1.0211, this could open up a target of 0.9920. The intermediate levels to watch are at 1.0135 and 1.0030.

On the 4-hour chart, today's price increase during the Pacific session was halted by the MACD line at 1.0278. Should the price gain the strength to surpass this high, growth could extend to 1.0350. The convergence has yet to complete its course.

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Forex Analysis & Reviews: Forecast for EUR/USD on January 16, 2025

Despite significant movements across the market, European currencies closed on Tuesday with minimal changes: the euro lost 20 pips, while the pound gained 22 pips. Meanwhile, the S&P 500 rose by 1.83%, oil increased by 3.06%, and gold gained 1.50%. The stock and commodity markets were driven by high profit reports from major banks.

On the daily chart, the upward movement stopped at the 1.0350 resistance level. The signal line of the Marlin oscillator continues to develop within a triangle formation. The prevailing scenario suggests a likelihood of the price breaking below the 1.0211 signal level and aiming for support at 1.0135. On the H4 chart, after testing the resistance at 1.0350 and support at 1.0265 (the MACD line), the price returned to its position from Tuesday morning.

The Marlin oscillator remains at a similar level. Since the price has settled below the balance line (red moving average), we expect it to consolidate below the MACD line and test the signal level at 1.0211. If the price consolidates above 1.0350, a move toward 1.0461 becomes likely, representing an alternative scenario.

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Forex Analysis & Reviews: Forecast for EUR/USD on January 20, 2025

Today, the euro begins trading within the range established on January 15, where it remained throughout last week. Market attention is heavily focused on the inauguration of Donald Trump. If political and economic developments unfold as Trump has indicated, we can anticipate a strengthening of the dollar and a weakening of stock indices.

The euro appears to be set for a decline. On the daily chart, the Marlin oscillator has formed a triangle within a descending trend zone, which increases the likelihood of both the indicator and the price moving downward. A definitive signal for a price breakout to the downside would occur if the price breaches the 1.0211 level, which coincides with the oscillator's signal line breaking below the lower boundary of the triangle. The target for this move is 1.0135.

On the four-hour chart, the price has significantly reinforced the support of the MACD line, meaning that a breakdown of this support could trigger an impulsive decline. The Marlin oscillator is currently at the neutral zero line, suggesting potential synchronized movement. A firm break below 1.0265 would enable the price to effectively challenge the 1.0211 signal level.

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Forex Analysis & Reviews: Forecast for EUR/USD on January 21, 2025

On the day of Donald Trump's inauguration, it was announced that the new administration would not introduce "global" trade tariffs in the near future. This announcement led to an air of optimism in the markets; however, the U.S. Dollar Index fell by 1.26%, while the EuroStoxx 50 rose by 0.32%. Despite the optimism, the situation may be overly simplistic, as tariffs on various strategic goods, such as automobiles, are expected to be implemented soon. The extent and impact of these tariffs, particularly against China, will largely depend on China's willingness to negotiate. Additionally, investors are anticipating three Federal Reserve rate cuts this year. This expectation is driven not only by the prospect of lower inflation but also by the potential emergence of trade wars. Major players seem to be taking advantage of the situation to push medium-sized dollar buyers out of the market. Reports indicate that large speculators have accumulated a record-long dollar position since 2019. Once their positions are liquidated, the dollar is expected to continue strengthening in the medium term. However, CFTC data suggests that claims about these record positions may be misleading. Positions were larger at the beginning of 2020. And then, there was indeed an upward market reversal (in May), but that situation was linked to the pandemic and quantitative easing. Currently, these large positions could push the euro further downward without significant speculative spikes.

We maintain our perspective: on the daily chart, the euro has reached resistance at the MACD line and began to decline today. If the price consolidates below the support level of 1.0350, it will pave the way for a move towards the first target at 1.0135. For a more substantial movement, the price may linger above the support level for a day, awaiting the Marlin oscillator to shift into negative territory.

On the H4 chart, there are two significant support levels to monitor: the 1.0350 level and the MACD line at 1.0283. For the bears to gain full control, the price must break through both of these support levels.

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Forex Analysis & Reviews: Forecast for EUR/USD on January 23, 2025

Yesterday, the euro peaked at 1.0458. We previously identified a target level of 1.0461, based on the low from December 2; however, this can now be adjusted to the December 13 low, which sets the new target at 1.0454. The euro surpassed this by 4 pips. Ultimately, the price reached the resistance level but failed to consolidate above the balance line, closing the day with a 21-pip decline and did not consolidate above the MACD line.

This morning, the price continues to press against the MACD line, while the Marlin oscillator has turned downward. If the support level at 1.0350 is breached, the next target will be 1.0135. A weak double divergence has formed on the H4 chart. The signal line of the Marlin oscillator is nearing negative territory.

We expect the price to test the 1.0350 support level soon. This level is reinforced and its significance is heightened by the MACD line, which is approaching the support level. A consolidation below 1.0350 could trigger a sharp price decline.

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