EUR/USD Forecast – Euro Drops Hard After NFP

Christopher Lewis
Published: Feb 2, 2024, 15:10 UTC

The Euro fell rather hard during the trading session on Friday, and the jobs report in the United States came out much hotter than anticipated.

Euro bill, FX Empire

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EUR/USD Forecast Video for 05-02-2024

Euro vs US Dollar Technical Analysis

The Euro initially tried to rally during the trading session on Friday, but then sold off quite drastically to reach down towards the 200 day EMA after the jobs number in the United States ended up being much stronger than anticipated. With that being the case, the market is likely to continue to bounce back and forth in this general vicinity, as there is a lot of support near the 1.08 level. This is an area that has been important multiple times, so it would not surprise me at all to see it hold or at least the market turn around and jump back over it. With this, I remain cautiously optimistic about a sideways market, if that makes sense.

Whether or not we break down through here remains to be seen, but the next target could be 1.0750 underneath, which was a swing low on the upside. Then 1.09 level is a resistance barrier, and that’s assuming that we can get back above the 50 day EMA. Keep in mind that the Euro is probably struggling not only from US dollar shrink, but the fact that Germany is now in a recession, so it’s very possible that the European Central Bank will have to cut.

We have to think that sooner or later the German recession almost certainly will bring down the rest of the EU. With this, I think you have more choppy nonsense and this is going to be a market that you probably want to avoid, but you could use it as a potential signal for what’s going on with the US dollar, not necessarily so much to do with Europe in general. This is a market that I think continues to be very noisy and sideways, although Friday is extraordinarily negative. That being said, Thursday was extraordinarily positive. So we get more back and forth and I just don’t see that changing. Look for the outer ranges of the consolidation phase and play off of that until we get some type of long, impulsive candlestick.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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