ECB rate cut expectations support EURUSD growth

The EURUSD rate is strengthening, while the pressure from buyers is mounting, with the price currently at 1.0465. Find out more in our analysis for 24 January 2025.

EURUSD forecast: key trading points

• Traders expect the Federal Reserve to keep the interest rate at the current level at its next meeting
• The markets estimate the likelihood of an ECB rate cut at 96%
• High expectations of monetary policy easing by the European regulator bolster the current EURUSD growth
• EURUSD forecast for 24 January 2025: 1.0560 and 1.0595

Fundamental analysis

The EURUSD rate continues its upward momentum on Friday morning, testing the 1.0460 resistance level. However, despite the current growth, the US dollar remains under pressure due to US President Donald Trump’s refusal to immediately impose aggressive tariffs, which the market expected him to do after the inauguration.

At the World Economic Forum, President Trump called for an immediate rate cut and reiterated his commitment to a low-tax policy for US manufacturers.

However, the Federal Reserve is expected to leave the interest rate unchanged at its meeting scheduled for next week. The Federal Reserve and European Central Bank rate decisions will be announced on Wednesday and Thursday.

The markets estimate the likelihood of an ECB interest rate cut at 96%. The high degree of expectations is bolstered by recent statements from the regulator’s officials about the possibility of easing monetary policy, which exerts pressure on the euro.

EURUSD technical analysis

EURUSD quotes have consolidated above the upper boundary of a Triangle pattern. According to today’s EURUSD forecast, this pattern will highly likely be implemented with targets at 1.0560 and 1.0595. However, the price could retest the breached boundary at 1.0435 before bullish momentum begins. To complete the Triangle pattern, the buyers need to gain a foothold above 1.0460.

The Stochastic Oscillator is approaching the overbought area, which could indicate a potential bearish correction. However, it should be noted that the previous attempts to reverse in the overbought area did not lead to a significant price decline.

The upward movement will be cancelled if the price returns to the Triangle pattern and consolidates below 1.0405, paving the way for a fall to the lower boundary of a bullish channel at 1.0365. A breakout below this level will open the potential for a deeper bearish correction towards 1.0315.

Summary

The EURUSD rate is rising amid buying activity and President Trump’s statements. No change in the Fed interest rate and the potential easing of the ECB monetary policy increase the risks of the euro weakening. The EURUSD technical analysis suggests the implementation of the Triangle pattern with targets at 1.0560 and 1.0595 USD. However, before rising, the price could retest the previously breached pattern boundary at 1.0435. If the quotes return to the Triangle pattern and consolidate below 1.0405, this will pave the way for a decline to 1.0365.