The EURUSD rate is correcting after a two-day rise, with the price currently at 1.0374. Discover more in our analysis for 5 February 2025.
EURUSD forecast: key trading points
- US factory orders declined by 0.9% in December
- US job openings decreased by 556 thousand to 7.6 million
- US and China’s presidents are expected to have a phone conversation to discuss the current situation
- EURUSD forecast for 5 February 2025: 1.0435 and 1.0460
Fundamental analysis
The EURUSD rate is slightly declining. Buyers attempted to break above the 1.0385 level twice but failed, which increases the likelihood of a fall to the 1.0350 support level. Investors are keeping a close eye on the developments around US import tariffs, which continue to affect the markets.
Tariffs of 10% on Chinese imports imposed by Donald Trump’s administration on Tuesday triggered retaliatory measures from Beijing. China introduced duties on US goods, but they were moderate. The US and Chinese presidents are expected to have a phone call to discuss the current situation. This gives hope for possible easing of tensions and the cancellation of tariffs in the future.
Meanwhile, weak US economic data continues to weigh on the US dollar. Factory orders sank by 0.9% from the previous month, marking the strongest decline over the past six months. Analysts expected a 0.7% fall. Additionally, US job openings decreased by 556 thousand in December to 7.6 million, the second-lowest reading since January 2021. The previous lowest level was recorded in September last year.
EURUSD technical analysis
The EURUSD quotes remain within the downtrend despite two-day price growth. The buyers are now attempting to find a foothold above the EMA-65, which may indicate persistent pressure from the bulls. A breakout above this line will signal further growth to the EMA-285. According to the EURUSD forecast for 5 February 2025, the price is expected to rebound from the EMA-65 and fall to the upper boundary of the descending channel at 1.0350 before continuing its ascent to 1.0460.
The Stochastic Oscillator confirms potential growth in the EURUSD pair. The oscillator readings have exited the oversold area, and the second signal is the intersection of the %K and %D lines from bottom to top. A breakout above the upper boundary of the descending channel will confirm the rise, with the price consolidating above 1.0385.
An alternative scenario is possible if buyers fail to gain a foothold above the resistance level, with the EURUSD quotes plunging to 1.0290. This will be confirmed by a breakout below the lower boundary of the bullish channel and the resumption of the downward momentum. In this case, the downside target will be the 1.0215 level.
Summary
Weak US economic data, including decreased orders and job openings, exert pressure on the US dollar, increasing the likelihood of its weakening. At the same time, trade risks and China’s moderate retaliatory measures support uncertainty in the markets. The EURUSD technical analysis shows that the currency pair remains in a downtrend, while attempts to secure above the EMA-65 signal continued bullish pressure. A decisive breakout above the 1.0385 resistance level will open the door for growth to 1.0435 and 1.0460. In case of a failure, the price may resume its downward movement, targeting the 1.0290 and 1.0215 levels.
Source: Roboforex
