EUR/USD Forecast and News
EUR/USD climbs over 1.0780 on broad-market risk appetite recovery
EUR/USD gained ground on Thursday, finding upside on the week after the US Dollar broadly fell back after rising US Initial Jobless Claims sparked renewed hope of rate cuts from the Federal Reserve.
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EUR/USD Technical Overview
On the upside, EUR/USD is expected to encounter first resistance at the May high of 1.0812 (May 3), which precedes the intermediate 100-day SMA of 1.0832 and the April high of 1.0885 (April 9). North of here is the March top of 1.0981 (March 8), ahead of the weekly peak of 1.0998 (January 11), all before the psychological threshold of 1.1000.
Looking south, a break of the 2024 bottom of 1.0601 (April 16) might signal a return to the November 2023 low of 1.0516 (November 1). Once this zone is passed, spot may challenge the weekly low of 1.0495 (October 13, 2023), ahead of the 2023 low of 1.0448 (October 3) and the round milestone of 1.0400.
The 4-hour chart shows a marked recovery in the pair. Against that, there is an immediate up-barrier at 1.0812, followed by 1.0885. Meanwhile, the 200-SMA at 1.0741 offers initial contention seconded by 1.0723. The relative strength index (RSI) improved past 60.
Fundamental Overview
The resurgence of some bearish sentiment in the US Dollar (USD) sparked a noticeable reaction in EUR/USD, sending it to the area of two-day highs around 1.0780 on Thursday.
The Dollar's retracement also coincided with a broad-based negative session in US yields across different maturities, particularly after investors assessed the higher-than-expected increase in weekly claims while they continued to digest the Federal Reserve's recent decision to keep interest rates unchanged, along with the probability of the central bank initiating its easing cycle in September.
Regarding the latter point, CME Group’s FedWatch Tool indicated that the probability of lower rates in September rose to around 68%.
The Fed reiterated its readiness to adjust rates while expressing concerns about inflation and potential risks to economic stability. Moreover, the central bank hinted at a slowdown in the pace of balance sheet reduction, with Chair Jerome Powell suggesting that the next policy move is unlikely to involve a rate hike.
Looking ahead, any temporary weakness in the Dollar is expected to be short-lived due to the postponed expectations of a potential Fed interest rate cut later in the year.
Meanwhile, the unchanged monetary policy environment underscores the disparity between the Federal Reserve and other G10 central banks, notably the European Central Bank (ECB).
In relation to the ECB, recent statements from rate setters have hinted at an increasing likelihood of the bank commencing its easing programme in June, although uncertainties persist regarding the ECB’s future decisions beyond the summer. On the latter, de Guindos remarked earlier on Thursday that the ECB is cautious to predict any trend beyond June.
Looking forward, the relatively subdued economic fundamentals in the Eurozone, coupled with the resilience of the US economy, support expectations for a stronger Dollar in the medium term, particularly considering the growing probability of the ECB cutting rates well before the Fed.
With this perspective in mind, the potential for further weakness in EUR/USD should be considered in the medium term.
SPECIAL WEEKLY FORECAST
Interested in weekly EUR/USD forecast? Our experts make weekly updates forecasting the next possible moves of the Euro-US Dollar pair. Here you can find the most recent forecast by our market experts:
EUR/USD: Optimism prevailed, hurting US Dollar demand Premium
The EUR/USD pair advanced for a third consecutive week, accumulating a measly 160 pips in that period. The pair trades around 1.0760 ahead of the close after tumultuous headlines failed to trigger a clear directional path.
EUR/USD Big Picture
EUR/USD Bullish Themes
EUR/USD Bearish Themes
Latest EUR Analysis
Editors' picks
EUR/USD climbs over 1.0780 on broad-market risk appetite recovery
EUR/USD gained ground on Thursday, finding upside on the week after the US Dollar broadly fell back after rising US Initial Jobless Claims sparked renewed hope of rate cuts from the Federal Reserve.
GBP/USD hovers around 1.2500 post-BoE
GBP/USD alternates gains with losses around the 1.2500 neighbourhood amidst extra weakness in the Dollar, while market participants continue to digest the BoE event.
USD/JPY holds positive ground around 155.50 on Fed’s hawkish comment
USD/JPY trades on a stronger note around 155.50 on Friday during the Asian trading hours. The renewed US Dollar demand lifts the pair. Nonetheless, the verbal intervention and the hawkish comment from the Bank of Japan’s Governor Kazuo Ueda might cap the downside of the Japanese Yen for the time being.
Gold price extends the rally despite hawkish Fedspeak
Gold price gains momentum on Friday despite the modest rebound in US Dollar. The yellow metal edges higher as many economists expect a weakening labor market could prompt the Federal Reserve to cut interest rates sooner than currently expected to stimulate economic growth.
Oil gains ground above $79.20 amid rising demand optimism in China
Western Texas Intermediate, the US crude oil benchmark, is trading around $79.30 on Friday. The black gold edges higher amid optimism about rising demand in China and the US, the world's two biggest crude-consuming nations.
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EUR/USD Yearly forecast
How could EUR/USD move this year? Our experts make a EUR/USD update forecasting the possible moves of the euro-dollar pair during the whole year. Don't miss our 2024 EUR/USD forecast!
EUR/USD FORECAST 2024
In the EURUSD 2024 Forecast, our analyst, Valeria Bednarik, anticipates gains for the next couple of months. The Eurozone economy would need to show steady signs of recovery to prevent EUR/USD from collapsing below 1.0390 in the year's second half. Read more details about the forecast.
The pair traded as low as 1.0447 and as high as 1.1275 throughout 2023, with currencies moving on sentiment.
MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR EUR/USD
There is a note of color that would stand out in the upcoming months: the US 2024 presidential election that will take place on November 5. The contest nomination will start as soon as January and run until June. The pinch of drama comes from Donald Trump’s desire to represent Republicans once again. A potential second government of Donald Trump could mean higher inflationary pressures as Trump could reintroduce tariffs on imports and push against the agreements between China and the Biden administration.
Influential Institutions & People for the EUR/USD
The Euro US Dollar can be seriously affected by news or the decisions taken by two main central banks:
The European Central Bank (ECB)
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone and maintain price stability, so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to 2% over the medium term. Another of its tasks is one of controlling the money supply. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde is the President of this organism.
ECB Official Website, on Twitter and YouTube
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
Christine Lagarde
Christine Lagarde was born in 1956 in Paris, France. Graduated from Paris West University Nanterre La Défense and became President of the European Central Bank in November 1st 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007–2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005–2007).
Lagarde on ECB'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
ECB NEWS & ANALYSIS
FED NEWS & ANALYSIS
About EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EUR/USD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, it is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online. If there is important U.S. data we can expect quiet markets just ahead of the number. U.S. economic news have the ability to either reinforce an existing trend or reverse it depending on by how much it missed or beat expectations with the EUR/USD news. By 5:00 GMT liquidity leaves the market once again as European traders close out positions and head home.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', reffering to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.
USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair is one of the 'Majors', the most important pairs in the world. Japanese Yen has a low interest rate, normally used in carry trades, that's why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when reffered to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is dued to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.