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31.01.202409:11 Forex Analysis & Reviews: Hot forecast for EUR/USD on January 31, 2024

There is no doubt that the Federal Reserve will leave interest rates unchanged today's meeting. However, what is somewhat surprising, and even alarming, is the unanimous opinion of all major media outlets that the US central bank will announce the start of the monetary easing cycle today. Yes, Fed Chair Jerome Powell has repeatedly spoken about it and hinted that this will happen in the first half of this year. However, this was before the latest US inflation data was published. But it rose and this came as a complete surprise to everyone.

It is quite possible that the Fed will delay the announcement of the start of interest rate cuts for this reason. In this case, the dollar will naturally rise. Quite significantly, in fact. But if the approximate timing for the first rate cut is announced, the dollar will start to actively fall. There seems to be no third option. The market cannot stay in place, and it will either move up or down.

Exchange Rates 31.01.2024 analysis

The volume of short positions on the EUR/USD pair decreased around the level of 1.0800, resulting in a minor pullback.

On the four-hour chart, the RSI indicator is moving in the lower area of 30/50, confirming the increase in selling volumes.

On the same chart, the Alligator's MAs are headed downwards, corresponding to the current cycle.

Outlook

Based on the scale of price changes, we came to the conclusion that there are no crucial changes. The downtrend persists, and keeping the price below 1.0800 could extend the current cycle.

As for the upward movement, in order to raise the volume of long positions on the euro, the price must stay above 1.0900.

The complex indicator analysis points to a downtrend in the short-term and intraday periods.

*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.

Dean Leo,
Analytical expert of InstaSpot
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