Before the European Central Bank (ECB) meeting, Germany and the Eurozone’s GDP (October–December) were lower than expected. This caused the euro to weaken, and EUR/USD dropped to 1.0391.
As expected, the ECB decided to cut interest rates by 0.25%. Since the market had already expected this, the reaction was small. Later, some end-of-month euro buying happened, but ECB President Lagarde said, “It is too early to discuss stopping rate cuts.” Because of this, the euro started falling again.
It looked like the euro would continue falling until the market closed, but near the end of the New York session, U.S. President Trump said he would apply a 25% tariff on Canada and Mexico starting February 1. After this, EUR/USD moved back up to around 1.0390.
The ECB is expected to continue cutting interest rates in future meetings. At the same time, if Trump increases tariffs on Europe, the euro may weaken further. EUR/USD is likely to move in a downward trend.
EUR/USD Forecast Range: 1.0460 – 1.0350 (50%, Bollinger Band basis)
Note: The above is not a guarantee of profit. Make your own decisions when trading.