FX.co ★ EUR/USD. Weekly Preview. The Fed Minutes, Durable Goods Orders, Core PCE Index, and U.S. GDP

At the end of the past week, the euro-dollar pair remained within the range of 1.1830–1.1900, finishing Friday's trading at 1.1868. On one side, there were contradictory but relatively positive Non-Farm Payrolls, and on the other, the CPI and retail sales. Amid such a contradictory fundamental picture, the dollar remained in limbo. The greenback ceased to enjoy heightened demand but did not fall under a wave of sell-offs, maintaining its positions. As a result, EUR/USD essentially froze in place, awaiting "new input data."

The economic calendar for the upcoming week is rich with important releases, which could provoke significant volatility for the pair. Additionally, market participants will closely monitor speeches from Fed officials who may comment on the inflation and labor market data published last week.

On Monday, Fed Governor Michelle Bowman is expected to give a speech. She has previously stated that the current state of the U.S. labor market "remains fragile and vulnerable." Therefore, the Fed should be prepared to lower interest rates "if the employment situation worsens." In this context, her interpretation of the January Non-Farm Payrolls, which reflected the creation of 130,000 jobs (instead of the anticipated increase of 70,000), and the decline in unemployment to 4.3%, will be of particular interest. If she tightens her position and advocates for maintaining a wait-and-see stance, the dollar will receive background support.

On Tuesday, other Federal Reserve officials are set to speak: Fed Governor Michael Barr and San Francisco Fed President Mary Daly. As we know, Barr is viewed as a "moderate hawk"; he has repeatedly stated that the Fed should proceed cautiously with further monetary policy easing, "considering persistent inflation risks and the impact of trade tariffs on prices." In contrast, Mary Daly has voiced a softer stance. In her recent speeches, she indicated that the labor market remains unstable, which may require one or two rate cuts during 2026.

In other words, Barr advocates a balanced, cautious approach (emphasizing inflation risks). At the same time, Daly signals her readiness to support further monetary policy easing, citing the fragility of the U.S. labor market. Whether their rhetoric will change in light of January's NFP and CPI results will be revealed on February 17.

On Wednesday, the U.S. will publish durable goods orders data for December. The previous month recorded a relatively strong result: total orders increased by 5.3%, following a 2.1% contraction. The forecast for the current month was +3.1%. A negative dynamic is expected for December, with total durable goods orders anticipated to decline by 1.8%. If the report comes in below expectations (against such a weak forecast), the dollar will come under additional pressure. This dynamic will signal a weakening of business activity in the manufacturing sector, as this figure reflects companies' intentions to purchase equipment, machinery, and other "durable" goods tied to future production activity.

The minutes from the January Fed meeting will also be released on Wednesday. Recall that the Fed maintained all monetary policy parameters during the January meeting, implementing the basic and most anticipated scenario. Jerome Powell presented a less hawkish rhetoric concerning the expectations of most market participants. The Fed chair indicated that in the near future (i.e., in upcoming meetings), the central bank would maintain a wait-and-see stance. However, future steps will depend on incoming data (inflation, labor market, and GDP). Overall, the Fed reiterated its previously stated course toward easing monetary policy—the only question is the pace of interest rate cuts.

The January minutes will help us gauge the strength of dovish and hawkish sentiment within the Committee. Depending on the document's tone, the dollar will either receive support or face additional pressure. However, the Fed's minutes usually have limited influence on EUR/USD, considering that the minutes is published two weeks after the meeting (during which many Fed members have already expressed their positions).

On Thursday, all eyes will be on the Unemployment Claims report. The initial claims for unemployment benefits fluctuated between 199,000 and 210,000 during January. However, in February, it stubbornly remained around the 230,000 mark. According to forecasts, the number of claims for the current week is expected to rise by 229,000. Such a result will apply background pressure on the greenback. However, if the figure significantly exceeds the forecast level (i.e., is around 240,000 to 250,000), the release will provoke strong volatility for the EUR/USD pair—certainly not in favor of the U.S. dollar.

Key speakers on Thursday will include Atlanta Fed President Raphael Bostic and Chicago Fed President Austan Goolsbee.

Finally, on Friday, we will learn the December value of the core PCE index. This index is known to be the preferred inflation indicator for the Fed, as it includes not only direct expenditures but also, for example, medical services paid for by insurance companies or the state. The core PCE index is also less volatile and better reflects structural inflation trends rather than temporary fluctuations.

According to preliminary forecasts, the core personal consumption expenditures index for December is expected to remain at November's level, i.e., at 2.8% year-on-year. The dollar will receive substantial support if this figure approaches or reaches the three percent mark. Conversely, if the core PCE index shows signs of slowing, the dollar will face significant pressure amid a slowdown in the CPI (both overall and core).

Additionally, on Friday, preliminary data on U.S. GDP growth for the fourth quarter of last year will be released. Most analysts believe that the U.S. economy grew by 2.8% during this period, following a robust 4.4% growth in the previous quarter. Such a result is unlikely to please dollar bulls. A slowdown in growth from 4.4% to 2.8% does not appear critical (it's still a solid pace); however, it will indicate a gradual cooling of the economy following a strong third quarter. If the figure is below this weak forecast, the dollar will once again face a wave of sell-offs.

This is not an exhaustive list of the planned events/releases. However, these reports and the speeches from Fed members will set the tone for trading in the EUR/USD pair. All other releases (ZEW/PMI indices, data on pending home sales in the U.S., building permit data, etc.) will play a secondary role.

It is advisable to consider short positions on the EUR/USD pair only after bears have broken through the support level of 1.1830 (the middle line of the Bollinger Bands coinciding with the Kijun-sen line on D1). Currently, the "technical" indicators signal a priority for long positions: on the D1, W1, and MN timeframes, the pair is positioned between the middle and upper lines of the Bollinger Bands indicator, as well as above all lines of the Ichimoku indicator (which has formed a bullish "Parade of Lines" signal). The resistance level is at 1.1920 (the upper edge of the Kumo cloud coinciding with the upper line of the Bollinger Bands on the H4 timeframe).