FX.co ★ Forecast for EUR/USD on February 2, 2023

So, the Federal Reserve raised the rate by the expected 0.25%. This did not seem enough to the markets, and the dollar index fell by 0.94%, while the euro gained 126 points. The speech of Fed Chairman Jerome Powell was pretty tough, he says it would be premature to declare victory against inflation, that history cautions strongly against prematurely loosening policy. The logic behind yesterday's rally is not quite clear. Perhaps investors didn't believe Powell and are counting on a sooner end to the rate hike cycle. Investors are also waiting for the European Central Bank to hike rates by 0.50% today.

Anyway, the price overcame the target level of 1.0990 and now it has an equally ambitious target of 1.1200.

As for the strong dollar policy, which we mentioned in yesterday's review, I would say that maybe now isn't the time for a decisive attack. It is quite possible to skip the euro until 1.1270 – until the correction of 62% of the total fall since January 2021.

On the four-hour chart, the price has settled above both indicator lines, above 1.0990, the Marlin oscillator is in a strong rising position, it may slow down for a resumption of growth after the ECB meeting.