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In the recent FOMC regular meeting, the Fed dismissed the possibility of a rate cut in March. The release of the U.S. non-farm payroll data for January, surpassing expectations with an increase of 353,000 jobs, dampened expectations for a rate cut. Until a clear-cut policy for a rate cut is announced by the Fed, the rise of the euro seems challenging.
Recent market conditions and notable issues include:
- The U.S. non-farm payroll increased significantly, with 353,000 jobs added, surpassing the expected 185,000. It recorded the largest year-over-year increase in a year since January 2023, which had 482,000 added jobs.
- CME Fedwatch lowered the probability of a rate cut in May to around 70%, while reflecting a 20% chance of a rate cut in March.
- The European Central Bank's monthly report will be released on February 8.
- On February 13, the U.S. Consumer Price Index will be announced.
The euro is in a process of transitioning from an upward trend to a downward trend after departing from its rising trend. However, it has not completely reversed to a downward trend yet, so there may still be opportunities for a rebound. To complete the downward trend, a decline to the lower trend line, around 1.03500, needs to occur. Considering the assumed trend development, two possible movements can be anticipated:
Firstly, receiving support at the previous low of 1.07000 and confirming a high point for a medium to long-term decline.
Secondly, continuing the current decline, breaking the previous low, and experiencing a short to medium-term decline.
These two movements are the most likely scenarios, and if there are unexpected movements, we will adjust our strategy accordingly.
In the recent FOMC regular meeting, the Fed dismissed the possibility of a rate cut in March. The release of the U.S. non-farm payroll data for January, surpassing expectations with an increase of 353,000 jobs, dampened expectations for a rate cut. Until a clear-cut policy for a rate cut is announced by the Fed, the rise of the euro seems challenging.
Recent market conditions and notable issues include:
- The U.S. non-farm payroll increased significantly, with 353,000 jobs added, surpassing the expected 185,000. It recorded the largest year-over-year increase in a year since January 2023, which had 482,000 added jobs.
- CME Fedwatch lowered the probability of a rate cut in May to around 70%, while reflecting a 20% chance of a rate cut in March.
- The European Central Bank's monthly report will be released on February 8.
- On February 13, the U.S. Consumer Price Index will be announced.
The euro is in a process of transitioning from an upward trend to a downward trend after departing from its rising trend. However, it has not completely reversed to a downward trend yet, so there may still be opportunities for a rebound. To complete the downward trend, a decline to the lower trend line, around 1.03500, needs to occur. Considering the assumed trend development, two possible movements can be anticipated:
Firstly, receiving support at the previous low of 1.07000 and confirming a high point for a medium to long-term decline.
Secondly, continuing the current decline, breaking the previous low, and experiencing a short to medium-term decline.
These two movements are the most likely scenarios, and if there are unexpected movements, we will adjust our strategy accordingly.