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31.07.202405:00 Forex Analysis & Reviews: Forecast for EUR/USD on July 31, 2024

EUR/USD

Yesterday, the euro traded within a 37-pip range, ending the day with a 7-pip decline on volumes comparable to Monday's (above average). Speculators likely closed their positions ahead of today's FOMC meeting. As on Monday, yesterday's low was at the support level of the daily balance line. Today, the price started to rise above the indicator lines, but the Marlin oscillator, a leading indicator, is set for a decline.

It appears that the Federal Reserve is playing a psychological game with investors. Several investment houses and banks have floated the idea of a three-time rate cut by the Fed by the end of the year, implying a rate cut at each meeting starting from September. This idea has taken hold—futures now show a rate cut to 4.75% at the December meeting with a probability of 56.4% compared to 48.8% a week earlier.

Exchange Rates 31.07.2024 analysis

We believe that the Fed does not intend to confirm such a plan today, and the dollar will continue to strengthen due to investor "disappointment." If the price breaks the support at the target level of 1.0788 and the MACD line (1.0777), then our observation will be confirmed, and the euro will subsequently decline to the target range of 1.0636/50.

Exchange Rates 31.07.2024 analysis

On the 4-hour chart, the price and the Marlin oscillator have formed a convergence, but at the same time, Marlin is moving sideways (gray rectangle), making the reversal pattern ambiguous. We await the FOMC decision and the subsequent speech by Fed Chair Jerome Powell.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Laurie Bailey,
Analytical expert of InstaSpot
© 2007-2024
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