Euro-to-Dollar Forecast: EUR/USD Tests 1.1910 Ahead of US Jobs Report

At 15:30 (GMT+2), market focus will shift to the U.S. January labor market report, which was postponed to this week due to the temporary federal government shutdown from January 31 to February 3 amid a lack of approved funding for several agencies. According to the consensus forecast, nonfarm payrolls are expected to increase from 50K to 70K, while annual average hourly earnings growth may slow from 3.8% to 3.6%, signaling easing inflationary pressure and reducing the likelihood of a faster monetary policy easing cycle by the Federal Reserve this year. Official Fed projections remain unchanged, pointing to only one 25-basis-point rate cut from the current 3.50–3.75% range, whereas market participants are pricing in at least two moves of similar magnitude. The unemployment rate is likely to remain steady at 4.4%. According to the U.S. Bureau of Labor Statistics, December unemployment declined from a revised 4.5%, with the number of unemployed standing at approximately 7.5 million. Later in the session, at 21:00 (GMT+2), the monthly U.S. budget statement will be released. Although the deficit persists, it is expected to narrow from –$145.0B to –$92.3B in January.

Meanwhile, European investors and forex traders continue to assess key inflation data showing the annual rate slowed to 1.7% — the lowest since September 2024 — firmly below the European Central Bank’s 2.0% target, primarily due to a 4.1% year-on-year decline in energy prices. More importantly for policymakers, core inflation excluding food and energy eased to 2.2%, the lowest level since October 2021. Some analysts note that such deceleration partly reflects weak domestic demand, which is not a positive signal for the broader economy. ECB Governing Council member Peter Kazimir stated that meaningful adjustments to monetary policy would require significant deviations from current economic and inflation trends. Traditionally hawkish, Kazimir emphasized that under the baseline scenario no immediate policy revision is anticipated, while inflation risks remain balanced and dependent on energy price developments. He also highlighted elevated uncertainty and volatility in financial markets due to fragile economic conditions. The ECB has kept rates unchanged since June, when it paused its dovish cycle: the main refinancing rate stands at 2.15%, the marginal lending facility at 2.40%, and the deposit rate at 2.00%. In its latest statement, policymakers reiterated that updated projections suggest inflation will stabilize around 2.0% in the medium term. The economy shows moderate resilience, supported by low unemployment (7.1% in January) and gradual fiscal expansion, although persistent geopolitical and trade risks may disrupt supply chains, weigh on exports, and dampen consumption. ECB President Christine Lagarde stressed that future decisions will remain data-dependent, without committing to a specific rate path, and noted that artificial intelligence development is emerging as a significant driver of private investment, particularly in ICT sectors.

Support and Resistance Levels

On the daily chart, Bollinger Bands are trending higher, while the price range is narrowing, reflecting mixed short-term dynamics. The MACD has reversed upward, forming a new buy signal as the histogram moves above the signal line. The Stochastic oscillator is approaching overbought territory, indicating short-term overheating risks for the euro.

Resistance levels: 1.1950, 1.2000, 1.2050, 1.2081.

Support levels: 1.1900, 1.1850, 1.1800, 1.1764.

Trading Scenarios and EUR/USD Forecast

Long positions may be considered after a confirmed breakout above 1.1950, targeting 1.2050 with a stop-loss at 1.1900. Implementation period: 2–3 days.

A return of bearish momentum with a breakout below 1.1850 could signal short positions targeting 1.1764 with a stop-loss at 1.1900.