EURUSD loses ground ahead of the ECB decision

The EURUSD rate is falling after rebounding from the resistance level, with the price currently at 1.0411. Discover more in our analysis for 30 January 2025.

EURUSD forecast: key trading points

• The Federal Reserve held interest rates steady
• The Fed noted sustainable economic growth and a healthy labour market
• Analysts expect a 25-basis-point ECB rate cut
• EURUSD forecast for 30 January 2025: 1.0365 and 1.0245

Fundamental analysis

The EURUSD rate is declining for the third consecutive session. The US dollar received support after the Federal Reserve decided to keep interest rates unchanged. The regulator noted sustainable economic growth and a stable labour market but refrained from previous comments on progress in reducing inflation.

At a press conference, Federal Reserve Chairman Jerome Powell underlined that the US economy remained strong, while inflation was somewhat elevated. According to Powell, the Fed does not need to rush to adjust monetary policy after lowering rates in the second half of 2024.

The market focus is now shifting to the ECB, with analysts expecting a 25-basis-point rate cut. ECB President Christine Lagarde said that the central bank would continue to gradually lower interest rates, but the timing and pace will depend on economic data.

The ECB will announce its decision today after which Lagarde will hold a press conference. Traders will be looking for signals on the future monetary policy course though the ECB leadership will unlikely make any specific commitments at this stage.

EURUSD technical analysis

Despite buyers’ attempts to secure above the EMA-285 line, the EURUSD pair remains within the downtrend. Sellers managed to bring the price back into the bearish channel and gain a foothold below the lower boundary of the bullish corrective channel.

Today’s EURUSD forecast suggests a price rise to the channel’s upper boundary at 1.0435 followed by a decline to 1.0245. If the price firmly consolidates below 1.0365, this will strengthen the downward momentum. At the same time, the price should be below the EMA-65 Moving Average for the bearish scenario to be confirmed.

The analysis of the Stochastic Oscillator confirms a potential decline. The Oscillator readings exited the overbought area, and the intersection of the %K and %D lines formed a bearish signal. This indicates continued pressure from sellers and a high probability of a further downward movement.

An alternative scenario, suggesting a bullish correction in the EURUSD rate, is possible if the price consolidates above 1.0485, indicating a breakout above the upper boundary of a descending channel. In this case, the price could maintain its upward momentum towards the key 1.0560 resistance level.

Summary

The Federal Reserve comments remain hawkish, supporting the US dollar, while the market awaits signals from the ECB on further rate cuts. The EURUSD technical analysis shows that the pair remains in a downtrend, with the nearest targets at 1.0365 and 1.0245. Price consolidation below the EMA-65 will increase the bearish momentum, confirming the movement to the above targets.