EURUSD Weekly Analysis 02/08/2025

Fundamental analysis

1. Overview of Momentum and Market Structure

• Current Momentum: Bullish.

• Previous Week's Performance: Bullish.

• Range: 1.0210 – 1.0442

• Expectations: Anticipating a bullish continuation within the range, targeting new highs.

Trading Plan

Bearish Bias

• Strategy:
  Watch for price action rejections at the following resistance zones:

  • 1.0442(Extreme Liquidity)

  • 1.0531 Extension

• Targets:

  • Primary target: 1.0304 (H4 Liquidity) and 1.0271 (H4 Liquidity).

  • Secondary target: 1.210 (Extreme Liquidity)

For Long

• Strategy:
  Monitor price action at the following support levels for potential reversals:

  • 1.0304 (H4 Liquidity)

  • 1.0271 (H4 Liquidity)

• Confirmation:
  Look for reversal patterns such as bullish engulfing candles or order block formations before entering long positions.

• Targets:

  • Primary Target: 1.0410 (H4 Liquidity) and 1.0442 (Extreme Liquidity).

  • Extended Target: 1.0531 and 1.0586 (Extensions).

Summary

• The bias remains bullish within the 1.0210 – 1.0442 range.

• Long entries are favorable around support levels (1.0304, 1.0271) with confirmation.

• Short opportunities may arise near or above 1.0440/1.0531 if signs of exhaustion emerge.

• Use your strict money management rules to manage risks effectively.

Technical analysis

The EUR/USD pair dropped to near 1.0360 after the release of the January U.S. Nonfarm Payrolls (NFP) data. The NFP report showed a slower-than-expected 143,000 new jobs, but a surprising acceleration in wage growth (4.1% year-on-year) added pressure on the Euro. The U.S. Dollar strengthened, pushing the Dollar Index (DXY) near 107.90.

While the NFP report’s modest labor data signals possible Fed rate cuts in June, market uncertainty remains as Fed Chair Jerome Powell suggested monetary adjustments would depend on inflation progress or labor market weakness.

In the Eurozone, concerns about U.S. tariffs on European goods are growing. ECB official Piero Cipollone warned that such tariffs, particularly on China, could be deflationary for the Eurozone, amplifying economic challenges. Analysts also foresee increased risks if U.S. tariffs target Europe more directly, fueling trade tensions and weighing further on the Euro.

With the ECB maintaining a dovish outlook and U.S. rates potentially holding steady, EUR/USD remains under pressure as traders eye tariff developments and economic data.