Will EURUSD return to 1.0810?

The EUR/USD is extending gains towards the 1.0900 level in the early European morning hours on Friday. The US dollar is struggling to find strength, allowing the euro to rise further in an optimistic climate. All eyes are now on the release of the US Non-Farm Payrolls (NFP) data. Regarding the dollar, the US Dollar Index (DXY) has remained within the established multi-day range as market participants continued to digest the latest developments from the January 31 FOMC event. On this note, it is worth remembering that Powell stated that the Federal Reserve is ready to maintain the current policy rate for an extended period, if necessary. He emphasized that substantial advancements in inflation are uncertain and hinted at the possibility of initiating rate cuts at some point this year. Powell underscored the tight labor market, also acknowledging the potentially negative impact on the economy if rate cuts were delayed. He emphasized that decisions will be made on a meeting-by-meeting basis, expressing the belief that the policy rate has likely peaked and suggesting at the same time that a rate cut in March seemed unlikely. In the future, investors are expected to keep the possibility of the first rate cut in March or May open, with probabilities of around 37% and 60%, respectively, according to CME Group's FedWatch tool. NFP should provide further details on the timing of any future interest rate decisions. On this point, another strong employment data in January should maintain the idea of a tight labor market and strengthen the perception of a soft landing amid a persistently resilient economy, ultimately supporting the idea of a Fed rate cut in May and thus supporting the US dollar as well as short-term yields. As for the technical forecast, I expect a liquidity grab above the Asia highs at the 1.09 level with a structural change downward on the M5 and the formation of a FVG, which will be our entry point for a short trade down to 1.081. Greetings and happy trading to everyone from Nicola.

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Good reaction above the swing High and the Asian high, now waiting for the NFP!

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Target reached after NFP!