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31.01.202505:01 Forex Analysis & Reviews: Forecast for EUR/USD on January 31, 2025

Relevance up to 21:00 UTC--5

At yesterday's meeting, the European Central Bank lowered its key interest rates by the expected 0.25%. In its accompanying statement, the central bank emphasized its commitment to a restrictive policy, which has led the markets to strengthen expectations for another rate cut in March and to anticipate a total of three cuts by the end of the year.

Exchange Rates 31.01.2025 analysis

However, the euro did not decline significantly, dropping only 30 pips, primarily due to weak GDP data. In the fourth quarter, GDP showed zero growth compared to an expected increase of 0.1%, while the annual GDP remained at 0.9%, falling short of the anticipated 1.0% growth.

It is important to note that GDP has a unique characteristic compared to other indices—it often accumulates alongside subsequent weak data and can have a delayed effect that extends over a week. Next week, key inflation data, PMI reports, and a broad range of U.S. economic indicators, including unemployment figures, will be released for the Eurozone. However, the euro approaches these events from a notably weak position. A consolidation below the 1.0350 support level could open the door for a decline toward the 1.0135 target.

Exchange Rates 31.01.2025 analysis

On the four-hour chart, the euro consolidated below the balance and MACD indicator lines after making a false breakout above them and reversing from the 1.0458 resistance level. The Marlin oscillator has turned downward from the zero line. Currently, the price is consolidating above the 1.0350 level while aiming for a breakout.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Laurie Bailey,
Analytical expert of InstaSpot
© 2007-2025
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