Forex Market Forecast for February 2024

Nick Ranga

Forex Market Forecast for February 2024

So we are a month into 2024, and, well, not too much has changed so far. Equities are rising, but various geopolitical and economic concerns have stopped the risk-associated currencies from rallying. Here are some key points to consider for February:

  • As we mentioned last month, continue to assess how geopolitical tensions are impacting the markets you are trading and the potential outcomes if they increase further or begin to decrease. Focus on risk management.
  • Inflation in some regions has crept higher recently. Keep an eye on how central banks and markets assess the latest data in the form of rate cuts this year.
  • As a result of the slight rise in inflation, expectations of interest rate cuts may now ease. Consider how this will impact the currency pair(s) you are trading.

US Dollar

While we expected a slightly weaker dollar in January, we did caution that the geopolitical tensions could change sentiment at any time. While the dollar didn’t surge against the other major currencies, it has continued to gain some strength as market worries persist. Picking a directional play for the month at the moment is risky, given there could be a change in sentiment at any time, although the latest escalation in tensions in the Middle East suggests dollar strength may persist. Like last month, it is essential to continue assessing the news and sentiment for developments.

Key Levels

  • EURUSD: Higher – 1.1090, Lower – 1.0750
  • GBPUSD: Higher -1.2800, Lower – 1.2600
  • USDJPY: Higher – 151.72, Lower – 144.90


The euro weakened against the US dollar through most of January, and while writing this piece, it continues to slide. From a purely technical perspective, the EURUSD daily chart suggests the move lower will continue if the price can break the bullish trend line. Coincidentally, I saw this tweet from Fink today, which suggests a move lower for the EURUSD. The GBP, which we will come onto later, has remained surprisingly resilient against the dollar in January and has made strong gains against the euro. With Germany’s economic woes continuing, the EURGBP may be one to watch for a continued move lower in February. However, it is currently at a key and very strong level (not included below).

Key Levels

  • EURUSD: Higher – 1.1090, Lower – 1.0750
  • EURGBP: Higher – 0.8620, Lower – 0.8475

British Pound

Surprisingly, the GBP was quite resilient against the US dollar in January, while it made gains against the other major currency pairs.  From a technical perspective, the currency looks vulnerable, but with UK inflation creeping higher in the latest reading, we could see rates remain elevated, providing the currency some strength. The current global uncertainties mean we are somewhat cautious regarding our approach to risk on pairs, but the GBP is undoubtedly one to keep an eye on. Remember, on Thursday, February 1, the BoE will announce its latest rate decision.

Key Levels

  • EURGBP: Higher – 0.8620, Lower – 0.8475
  • GBPUSD: Higher -1.2797, Lower – 1.2600

Japanese Yen

There were a couple of positive months at the end of 2023 for Japanese yen bulls. However, 2024 has not been kind, with the currency falling against the other majors. However, traders are still watching for a potential surprise in the form of a rate rise from the Bank of Japan “within months.” According to Reuters, at the conclusion of the BoJ’s policy meeting near the end of January, it “maintained its ultra-easy monetary settings but signalled its growing conviction that conditions for phasing out its huge stimulus were falling into place.” We don’t have a current directional bias, but if you are trading the yen, then make sure to keep an eye on central bank speakers and events.

Key Levels

  • USDJPY: Higher – 151.72, Lower – 144.90
  • EURJPY: Higher – 161.88, Lower – 157.10

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