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CFD Trading Rate Euro vs US Dollar (EURUSD)

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  • 20.03.2024 08:42
    EUR/USD seesaws in range ahead of Fed decision
    • EUR/USD recovers and oscillates in a range in the upper 1.0800s ahead of Wednesday’s Fed meeting. 
    • Speculation is mounting that the Fed could alter how many interest rate cuts it expects to make in 2024. 
    • Several ECB rate-setters are scheduled to take the stand at a conference on monetary policy.
       

    EUR/USD seesaws between tepid gains and losses on Wednesday, forming a range in the upper 1.0800s after rebounding from Tuesday’s 1.0830 lows on increased probabilities the Federal Reserve (Fed) will cut interest rates by June.  

    Interest rates, set by central banks, are a key driver of foreign exchange markets.  Lower interest rates tend to depreciate a currency by attracting less foreign capital inflows and vice versa for higher interest rates. 

    EUR/USD rebounds as June bets pick up

    EUR/USD has recovered marginally ahead of the Federal Reserve’s March Federal Open Market Committee (FOMC) meeting on Wednesday, the outcomes of which will be announced at 18:00 GMT. Bets that the Fed will start cutting interest rates – currently at 5.25%-5-50% for the Fed Funds Rate – by June are increasing.  

    According to the CME FedWatch Tool, which uses Fed Fund Futures to calculate the probability of future changes in the Fed Funds Rate, the probability of the Fed cutting rates by June is 64.0%, and 78.9% by July. 

    This marks an increase from the 55.1% and 73.7%, respectively, seen on Tuesday. This change in expectations could be responsible for the recovery in EUR/USD, which measures the value of a Euro in US Dollars. 

    Fed could change forecasts 

    The Fed is not expected to alter interest rates at its meeting but there is a chance it could revise its quarterly forecasts and accompanying statement. This could change the outlook for interest rates and therefore the US Dollar (USD) valuation. 

    EUR/USD could see volatility after the Fed meeting. Speculation is mounting that the Federal Reserve will revise its economic forecasts in the Summary of Economic Projections (SEP), and the “dot plot”, which reflects the Board of Governors of the Fed’s consensus of the future path of rates. 

    In the previous SEP, officials forecast three 25 basis points (0.25%) rate cuts in 2024 but some analysts now think there is a material risk that this could be revised down to two 25 bps cuts to reflect inflationary pressures remaining elevated. 

    “The summary of economic projections will be updated and contains hawkish risks in our assessment with the committee potentially projecting fewer cuts in 2024,” says David Doyle, head of economics at Macquarie, in a note about the Fed meeting. 

    ECB speakers set to take the stand

    In Europe, a similar debate is going on about when to begin cutting interest rates, with two camps emerging – those who favor waiting until the European Central Bank’s June meeting to decide (the official camp) and a smaller mutineering group who want to keep alive the possibility of an early spring rate cut. 

    On Tuesday, Vice-President of the European Central Bank (ECB), Luis de Guindos, maintained allegiance with the June camp after he said “we have to wait,” because “services inflation” remains too high. 

    Wednesday will see a host of ECB talking heads appear in public who could provide further intelligence on which way the ECB is swinging. This may also impact EUR/USD volatility

    The ECB President Christine Lagarde, ECB Chief Economist Philip Lane and ECB Executive Board member Isabel Schnabel are all set to speak at an "ECB and its Watchers" conference today, with Lagarde kicking off at 8.45 GMT, Lane at 9.30 and Schnabel at 13:45. 

    Later, the President of the Bundesbank, Joachim Nagel, is scheduled to take the podium at a  “Future of European Finance" conference at the ASKO Europa-Stiftung Foundation.

    Technical Analysis: EUR/USD falls below key level 

    EUR/USD has penetrated below the level of the 1.0867 swing lows and in doing so probably reversed the direction of the short-term uptrend. Now the odds slightly favor more losses. 

     Euro versus US Dollar: 4-hour chart

    Subject to fundamentals, the price will probably continue to fall to the next key support level at roughly 1.0800 – the lows of wave B of the Measured Move that unfolded in February and early March. 

    Thursday’s sell-off fell to a low of 1.0835 before recovering and thereby forming a bullish Japanese hammer reversal candlestick pattern on the 4-hour chart. This was followed by a little move higher. Since candlesticks are only short-term patterns, this upside could be at risk of petering out. 

    The daily chart below is showing the Moving Average Convergence/ Divergence (MACD) momentum indicator crossing over the signal line, giving a bearish sell signal, and adding further evidence to a change of trend. 

    However, it is also flagging up some key barriers to progress lower in the form of dynamic support from the red 50-day and then the green 200-day Simple Moving Averages (SMA). 

     Euro versus US Dollar: Daily chart

    On Tuesday price penetrated the 50-day SMA situated at 1.0848 but was repulsed by the 200-day SMA at 1.0839. As on the 4-hour chart, the price recovered and formed a hammer candlestick on the daily chart as well. 

    For confirmation of the hammer’s bullish reversal potential, Wednesday needs to end on a bullish note as a green candlestick. If that is the case, EUR/USD is likely to continue its recovery higher.

     

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 20.03.2024 08:23
    EUR/USD probably risks a drift to the 1.0800 area pre-FOMC – ING

    EUR/USD ended lower on Tuesday despite a bounce in the German ZEW investor survey back to levels last seen in early 2022. Economists at ING analyze the pair’s outlook ahead of the FOMC meeting.

    ECB big hitters on the wire today

    Most likely positioning ahead of the FOMC meeting is dominating and the Dollar is playing a little catch-up with last week's rise in higher short-term rates. 

    Out of the Eurozone today we have five European Central Bank speakers. Amongst those five are the big hitters Christine Lagarde, Isabel Schnabel and Philip Lane. Expect a repeat of the central message that more data is required before the ECB can seriously consider a rate cut at the June meeting. 

    EUR/USD probably risks a drift to the 1.0800 area pre-FOMC.

     

  • 20.03.2024 04:35
    EUR/USD Price Analysis: Holds steady above mid-1.0800s, lacks follow-through ahead of Fed
    • EUR/USD attracts some buyers and moves away from a two-week low set on Tuesday.
    • The technical setup warrants some caution for bullish trades ahead of the Fed decision.
    • A sustained break below the 1.0835 confluence should pave the way for deeper losses.

    The EUR/USD pair edges higher during the Asian session on Wednesday and for now, seems to have snapped a two-day losing streak to a nearly two-week low, around the 1.0835 region touched the previous day. Spot prices, however, lack follow-through buying as traders seem reluctant to place aggressive bets and prefer to wait on the sidelines ahead of the outcome of the highly anticipated two-day FOMC policy meeting later today.

    The Federal Reserve (Fed) is widely expected to keep rates at their historic highs, though might lower its projection for rate cuts in 2024 to two from three previously in the wake of still-sticky inflation. Hence, the focus will remain glued to the so-called "dot plot", which, along with Fed Chair Jerome Powell's remarks, will be scrutinized for cues about the future rate-cut path. This, in turn, will play a key role in influencing the US Dollar (USD) price dynamics and provide a fresh directional impetus to the EUR/USD pair.

    From a technical perspective, the recent pullback from the 1.0980 region, or the highest level since January 12 touched earlier this month, stalled near the 1.0835 confluence support. The said area comprises the very important 200-day Simple Moving Average (SMA) and the 50% Fibonacci retracement level of the February-March positive move, which might continue to protect the immediate downside and act as a key pivotal point. A convincing break below will be seen as a fresh trigger for bears and drag the EUR/USD pair lower.

    Given that oscillators on the daily chart have just started gaining negative traction, spot prices might then accelerate the fall to the 1.0800 mark, or the 61.8% Fibo. level, en route to the 1.0760-1.0755 region. Some follow-through selling could make the EUR/USD pair vulnerable to retesting sub-1.0700 levels, or the YTD low touched on February 14.

    On the flip side, any subsequent move up is likely to confront stiff resistance near the 1.0900 round-figure mark, nearing the 23.6% Fibo. support breakpoint. A sustained strength beyond will suggest that the corrective pullback has run its course and lift the EUR/USD pair back to the monthly peak, around the 1.0980 region. The momentum could get extended further beyond the 1.1000 psychological mark, towards the next relevant hurdle near the 1.1040 zone.

    EUR/USD daily chart

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  • 19.03.2024 23:10
    EUR/USD flat-lines above the mid-1.0800s, all eyes on Fed rate decision
    • EUR/USD trades flat around 1.0865 near multi-week lows amid the consolidation of the USD. 
    • The FOMC is expected to hold the interest rate and maintain macroeconomic projections at its March meeting on Wednesday. 
    • The Eurozone ZEW Economic Sentiment came in at 33.5 in March vs. 25.0 prior, better than expected. 
    • The FOMC monetary policy meeting will be in the spotlight on Wednesday. 

    The EUR/USD pair trades on a flat note above the mid-1.0800s during the early Asian session on Wednesday. Meanwhile, the USD Index (DXY) consolidates its gains near three-week highs of 103.80. Traders await the Federal Open Market Committee's (FOMC) monetary policy meeting later in the day and will take more cues from Chairman Jerome Powell’s press conference and economic projections after the meeting. At press time, the major pair is trading at 1.0865, unchanged for the day. 

    The Federal Open Market Committee (FOMC) is widely expected to keep its key federal funds interest rate unchanged in a range of 5.25% to 5.5%.and maintain macroeconomic projections at its March meeting on Wednesday. Analysts anticipate FOMC’s Powell to reiterate that the central bank wants to see evidence of inflation data in its battle against inflation before cutting rates. Financial markets expect a 25 basis points (bps) rate cut in July and total cuts of 100 bps this year. The US Dollar (USD) has attracted some buyers in the last sessions as the market’s expectations for rate cuts have been dialed back. 

    Across the pond, the ZEW Economic Sentiment for the Eurozone rose to 33.5 in March from the previous reading of 25.0, above the market consensus of 25.4. Meanwhile, the Economic expectations for Germany improved to 31.7 versus 19.9 prior. The reports suggested a more optimistic outlook for the Eurozone and Germany. However, the survey failed to boost the Euro (EUR) as traders prefer to wait on the sidelines ahead of the FOMC interest rate decision

    The European Central Bank (ECB) President Christine Lagarde is set to speak on Wednesday, and the European Commission will release its flash Consumer Confidence report for March. The FOMC monetary policy meeting will take center stage later on Wednesday. After the meeting, the attention will turn to Powell’s press conference, which might provide information on the central bank's outlook. 

    EUR/USD

    Overview
    Today last price 1.0865
    Today Daily Change -0.0007
    Today Daily Change % -0.06
    Today daily open 1.0872
     
    Trends
    Daily SMA20 1.087
    Daily SMA50 1.085
    Daily SMA100 1.0861
    Daily SMA200 1.0839
     
    Levels
    Previous Daily High 1.0906
    Previous Daily Low 1.0866
    Previous Weekly High 1.0964
    Previous Weekly Low 1.0873
    Previous Monthly High 1.0898
    Previous Monthly Low 1.0695
    Daily Fibonacci 38.2% 1.0881
    Daily Fibonacci 61.8% 1.0891
    Daily Pivot Point S1 1.0857
    Daily Pivot Point S2 1.0841
    Daily Pivot Point S3 1.0817
    Daily Pivot Point R1 1.0897
    Daily Pivot Point R2 1.0922
    Daily Pivot Point R3 1.0937

     

     

  • 19.03.2024 17:13
    EUR/USD under pressure as traders await FOMC decision
    • Euro losses a step vs US Dollar, eyes on Fed decision.
    • US housing gains, Building Permits, and Housing Starts rise.
    • Germany’s ZEW and EU surveys beat expectations, uplifting investor sentiment.

    The Euro remains on the defensive against the US Dollar as market participants await March’s monetary policy decision by the Federal Open Market Committee (FOMC) on Wednesday. Therefore, the EUR/USD trades at 1.0859 and loses 0.12%.

    EUR/USD dips amid central bank movement, positive US housing data

    Tuesday’s session witnessed two major central banks' decisions. The Bank of Japan (BOJ) exited from negative interest rates, though delivered a dovish hike, which weakened the Japanese Yen (JPY) against most G8 currencies. The Reserve Bank of Australia (RBA) holds rates unchanged at 4.35%, with the RBA still considering a rate hike if inflation reaccelerates.

    Aside from this, Wall Street prints decent gains as global bond yields drop. The US economic docket showed the housing sector is gathering steam. US Building Permits in February grew 1.9%, MoM, up from 1.489 million to 1.496 million. At the same time, Housing Starts for the same period exceeded estimates of 8.2%, increasing by 10.7%.

    In the meantime, the US 10-year Treasury bond yield retreats two basis points, down to 4.034%. The US Dollar Index (DXY), a gauge of the buck’s value against a basket of other currencies, gains 0.23%, up at 103.82.

    On the Eurozone’s (EU) front, Germany published the March ZEW Survey, which improved the country to 31.7, while the EU one surged to 33.5, beating estimates.

    EUR/USD Price Analysis: Technical outlook

    The EUR/USD daily chart suggests the pair is neutral to downward biased, though dynamic support levels like the 200, 100, and 50-day moving averages (DMAs) capped the Euro’s losses, opening the door for a recovery. If buyers lift the exchange rate above 1.0900, it could expose the March 13 high at 1.0964. followed by the year-to-date (YTD) high at 1.0981. On the other hand, sellers need to push prices below the 200-DMA at 1.0838, so they could threaten to challenge 1.0800.

    EUR/USD

    Overview
    Today last price 1.0864
    Today Daily Change -0.0008
    Today Daily Change % -0.07
    Today daily open 1.0872
     
    Trends
    Daily SMA20 1.087
    Daily SMA50 1.085
    Daily SMA100 1.0861
    Daily SMA200 1.0839
     
    Levels
    Previous Daily High 1.0906
    Previous Daily Low 1.0866
    Previous Weekly High 1.0964
    Previous Weekly Low 1.0873
    Previous Monthly High 1.0898
    Previous Monthly Low 1.0695
    Daily Fibonacci 38.2% 1.0881
    Daily Fibonacci 61.8% 1.0891
    Daily Pivot Point S1 1.0857
    Daily Pivot Point S2 1.0841
    Daily Pivot Point S3 1.0817
    Daily Pivot Point R1 1.0897
    Daily Pivot Point R2 1.0922
    Daily Pivot Point R3 1.0937

     

     

  • 19.03.2024 11:58
    EUR/USD: Intraday gains back above 1.0875 would give the Euro a little more technical strength – Scotiabank

    EUR/USD finds support in the low 1.0800s. Economists at Scotiabank analyze the pair’s outlook.

    EUR may be trying to rebound from the low 1.0800s

    Soft price action on Monday and a pickup in intraday bear momentum suggest downside risks remain for the EUR but early Tuesday price signals suggest the EUR may be trying to base/rebound from the low 1.0800s via an intraday bullish ‘hammer’ signal.

    Intraday gains back above 1.0875 would give the EUR a little more technical strength intraday. 

    Support is 1.0835/1.0840 and 1.0800.

     

  • 19.03.2024 09:36
    EUR/USD breaks lower prior to Fed meeting
    • EUR/USD descends into mid 1.0800s ahead of Wednesday’s key Fed meeting. 
    • Speculation is mounting that the Fed could alter how many interest rate cuts it expects to make in 2024. 
    • ECB Vice-President De Guindos sees services inflation still too high for a rate cut.
       

    EUR/USD declines by five hundredths of a percent into the mid 1.0800s on Tuesday, before the big event of the week in Forex, the Federal Reserve’s (Fed) March meeting policy announcement. 

    Although the Fed is not expected to change its interest rates at the meeting, there is a chance it could change its accompanying statement and forecasts. This could alter the outlook for interest rates and therefore the US Dollar (USD) valuation. 

    Interest rates, set by central banks, are a key driver for foreign exchange markets.  Higher interest rates tend to support a currency by attracting greater inflows of foreign capital with the opposite being the tendency for lower rates. 

    EUR/USD weakens as investors monetary policy expectations change 

    EUR/USD downside over recent days has mainly been driven by renewed US Dollar strength, on the back of a combination of rising expectations there will be a delay in the Fed cutting interest rates and that there may be fewer cuts overall in 2024. 

    Speculation is mounting that the Federal Reserve will revise the forecasts in its accompanying notes to the meeting, the Summary of Economic Projections (SEP). In the previous SEP, Fed officials forecast three 25 basis points (0.25%) rate cuts in 2024 but some analysts now think there is a material risk that this could be revised down to two 25 bps cuts to reflect inflationary pressures remaining elevated. A revision down to two cuts could pressure EUR/USD lower. 

    “The summary of economic projections will be updated and contains hawkish risks in our assessment with the committee potentially projecting fewer cuts in 2024,” says David Doyle, head of economics at Macquarie, in a note about the Fed meeting. 

    The market continues to see June as the first month when the Fed is more likely than not to make its first interest rate cut, but over the last few days July has gained in popularity. Current market-based probabilities, based on the CME FedWatch Tool, favor one or more cuts by June with a 55.1% chance, and by July with a 73.7% probability. The June figure has been trending down. 

    “Our view on FOMC policy remains that the first 25 bps cut will occur in July,” says Macquarie’s Doyle. “ In 2024 we anticipate 50 bps of cuts and a further 50 bps in 2025,” he adds.  

    Services inflation too high says De Guindos

    In Europe, a similar debate is going on about when to begin cutting interest rates. On Tuesday, Vice-President of the European Central Bank (ECB), Luis de Guindos, said “we have to wait,” because “services inflation” remains too high. 

    De Guindos said he thought June was the right time to review cutting interest rates. His views fall in line with that of the ECB President Christine Lagarde and several other officials. 

    Although a faction within the ECB led by Francois Villeroy de Galhau appeared to be pushing for a spring rate cut earlier in the month, they appear to be outnumbered by officials favoring June. 

    The EUR/USD seemed to find some support on Monday after the Eurozone Trade Balance data showed a healthy surplus for the region, and final revisions for inflation data for February came out in line with flash estimates.  

    Data out on Tuesday is unlikely to move the dial much. In Europe, German and Eurozone ZEW Survey results are scheduled for publication. In the US, Building Permits (a leading indicator) and Housing Starts will be released later in the day. 

    Technical Analysis: EUR/USD falls below key level, now vulnerable to more declines

    EUR/USD penetrates below the level of the 1.0867 swing lows on Tuesday, and by doing so probably reverses the direction of the short-term uptrend. Now the odds favor more losses. 

     Euro versus US Dollar: 4-hour chart

    A new series of declining peaks and troughs has begun since the March 8 highs. Subject to fundamentals, the price will probably continue to fall to the next key support level at roughly 1.0800 – the lows of wave B of the Measured Move that unfolded in February and early March. 

    The daily chart below is showing the Moving Average Convergence/ Divergence (MACD) momentum indicator crossing over the signal line, giving a bearish sell signal, and adding further evidence to a change of trend. 

    However, it is also flagging up a few key barriers to progress lower in the form of dynamic support from the red 50-day and then the green 200-day Simple Moving Averages (SMA). 

    Euro versus US Dollar: Daily chart

    The 50-day SMA is situated at 1.0848 and the 200-day SMA at 1.0839 and both are likely to be tough support levels to crack. Whether bears can push through, may well depend on the outcome of the up-and-coming Fed meeting.

     

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

     

  • 19.03.2024 08:33
    EUR/USD will struggle to get back above 1.0900 short term – ING

    EUR/USD remains under bearish pressure. Economists at ING analyze the pair’s outlook.

    EUR will likely ignore ZEW figures

    EUR/USD has softened a little, which seems to be more in line with short-term interest rate differentials. At -135 bps, two-year EUR:USD swap rate differentials remain at their widest levels for the year.

    We doubt a marginally better German ZEW number today will move the needle much on ECB rate cut expectations or the Euro and it looks like EUR/USD will struggle to get back above 1.0900 short term.

     

  • 19.03.2024 05:10
    EUR/USD Price Analysis: Keeps the bearish vibe above 1.0870
    • EUR/USD trades in negative territory near 1.0871 amid the cautious mood in Tuesday’s early European session. 
    • The pair keeps the bearish vibe below the key EMA; RSI indicator lies below the 50-midline. 
    • The first downside target is seen at 1.0852; the initial resistance level will emerge at 1.0882.

    The EUR/USD pair trades on a negative note during the early European session on Tuesday. The major pair moves in a narrow range between 1.0866 and 1.0876 as traders prefer to wait on the sidelines ahead of the Federal Reserve's (Fed) interest rate decision on Wednesday. At the press time, EUR/USD is trading at 1.0871, down 0.01% on the day. 

    Technically, EUR/USD maintains the bearish outlook unchanged as the major pair is below the key 50- and 100-period Exponential Moving Averages (EMA) on the four-hour chart. Furthermore, the downward momentum is further confirmed by the Relative Strength Index (RSI), which lies below the 50-midline, indicating that further downside looks favorable. 

    The first downside target for the major pair is located near the lower limit of the Bollinger Band at 1.0852. Further south, the next contention level is seen at the 1.0800 mark, representing the confluence of a low of February 22 and a psychological mark. A breach of this level will expose a low of February 20 at 1.0761, and finally a low of February 15 at 1.0725.

    On the other hand, the initial resistance level will emerge at the 100-period EMA at 1.0882. The critical upside barrier to watch for EUR/USD is the 1.0900-1.0905 region, portraying the 50-period EMA, psychological figure, and a high of March 18. A bullish breakout above the latter will see a rally to the upper boundary of the Bollinger Band at 1.0926, followed by a high of March 14 at 1.0955.

    EUR/USD four-hour chart 

     

    EUR/USD

    Overview
    Today last price 1.0871
    Today Daily Change -0.0001
    Today Daily Change % -0.01
    Today daily open 1.0872
     
    Trends
    Daily SMA20 1.087
    Daily SMA50 1.085
    Daily SMA100 1.0861
    Daily SMA200 1.0839
     
    Levels
    Previous Daily High 1.0906
    Previous Daily Low 1.0866
    Previous Weekly High 1.0964
    Previous Weekly Low 1.0873
    Previous Monthly High 1.0898
    Previous Monthly Low 1.0695
    Daily Fibonacci 38.2% 1.0881
    Daily Fibonacci 61.8% 1.0891
    Daily Pivot Point S1 1.0857
    Daily Pivot Point S2 1.0841
    Daily Pivot Point S3 1.0817
    Daily Pivot Point R1 1.0897
    Daily Pivot Point R2 1.0922
    Daily Pivot Point R3 1.0937

     

     

     

  • 19.03.2024 00:15
    EUR/USD remains under pressure above the mid-1.0800s, Fed rate decision eyed
    • EUR/USD remains on the defensive near 1.0872 amid renewed USD demand. 
    • The Fed is anticipated to hold benchmark interest rates steady in the range of 5.25%–5.50% at its March meeting.
    • ECB policymakers signaled progress in easing inflation and began discussions about the rate cut.
    • The Federal Reserve's (Fed) monetary policy meeting will be a closely watched event. 

    The EUR/USD pair edges lower to multi-day lows around 1.0870 on the firmer US Dollar (USD) during the early Asian session on Tuesday. The Federal Reserve (Fed) monetary policy meeting on Wednesday will be in the spotlight, with no change in rates expected. Meanwhile, the cautious mood in the market might lift the Greenback against the Euro (EUR). The major pair currently trades around 1.0872, unchanged for the day. 

    The recent US economic data showed inflation in the US economy remains elevated, and this pushed out market expectations for the first rate cut in June. The Fed Chairman Jerome Powell said two weeks ago that the central bank is not far from the confidence it needs to cut rates, while some Fed officials expect the first rate cut could happen later this year or during the summer.

    The Fed will announce its interest rate decision on Wednesday, which is anticipated to hold benchmark interest rates steady in the range of 5.25%–5.50% at its March meeting. Investors have priced in a nearly 73% chance that the Fed will cut rates in July, according to the CME FedWatch Tools.

    The European Central Bank (ECB) decided to keep borrowing costs at a record high at its March meeting. Nonetheless, the central bank policymakers signaled progress in easing inflation and began discussions about the rate cut. The ECB Governing Council member, Pablo Hernandez de Kos, said that the central bank may start lowering interest rates in June if inflation in the eurozone continues to decline. Meanwhile, ECB policymaker Mario Centeno stated that cutting borrowing costs could help prevent a euro area recession. 

    Additionally, ECB Governing Council member Klaas Knot penciled in June for a first-rate cut and expects three rate cuts this year, while ECB President Christine Lagarde said that June is the earliest it is likely to cut interest rates after the ECB lowered its forecasts for inflation and estimated it will reach its 2% target in 2025. 

    Looking ahead, market players will keep an eye on the German and Eurozone ZEW Survey on Tuesday. Also, the US Building Permits and Housing Starts will be released later in the day. The attention will shift to the Fed interest rate decision and press conference on Wednesday. Traders will take cues from this event and find trading opportunities around the EUR/USD pair.  

    EUR/USD

    Overview
    Today last price 1.0874
    Today Daily Change 0.0002
    Today Daily Change % 0.02
    Today daily open 1.0872
     
    Trends
    Daily SMA20 1.087
    Daily SMA50 1.085
    Daily SMA100 1.0861
    Daily SMA200 1.0839
     
    Levels
    Previous Daily High 1.0906
    Previous Daily Low 1.0866
    Previous Weekly High 1.0964
    Previous Weekly Low 1.0873
    Previous Monthly High 1.0898
    Previous Monthly Low 1.0695
    Daily Fibonacci 38.2% 1.0881
    Daily Fibonacci 61.8% 1.0891
    Daily Pivot Point S1 1.0857
    Daily Pivot Point S2 1.0841
    Daily Pivot Point S3 1.0817
    Daily Pivot Point R1 1.0897
    Daily Pivot Point R2 1.0922
    Daily Pivot Point R3 1.0937

     

     

  • 18.03.2024 18:09
    EUR/USD drops on high US yields as markets eye FOMC decision
    • Euro dips as investor focus on upcoming FOMC meeting and interest rate projections.
    • Eurozone inflation aligns with expectations, but EUR/USD's movement restrained by anticipation of Fed's policy direction.
    • ECB's Centeno highlights the importance of price stability and suggests rate adjustments could prevent recession in the Eurozone.

    The Euro drops against the US Dollar at the beginning of the week as investors brace for the Federal Open Market Committee (FOMC) monetary policy decision. Expectations that the ‘dot plots’ might adjust the Federal Reserve’s (Fed) projections of monetary policy put pressure on the EUR/USD, which trades at 1.0872, down 0.14%.

    EUR/USD falls ahead of Fed’s decision

    The current week will witness three major central bank monetary policy decisions. On Tuesday, the Bank of Japan is expected to raise rates by 10 basis points and end the era of negative interest rates. On Wednesday, the Fed is foreseen to keep policy unchanged, though speculations are mounting that the US central bank would likely adjust their projections on interest rates.

    Eurozone (EU) inflation in February, as measured by the Harmonized Index of Consumer Prices (HICP), cooled from 3.3% to 3.1% YoY, as expected. The core HICP edged lower from 2.8% to 2.6% aligned with forecasts. The data barely moved the EUR/USD pair as traders braced for the Fed’s decision in two days.

    In the meantime, European Central Bank (ECB) policymaker Mario Centeno said that price stability needs financial stability, adding that reducing the main rate may help avoid a recession in the bloc’s economy.

    Across the pond, the US economic schedule revealed that the National Association of Home Builders (NAHB) Market Index improved the most since July 2023, rising by 51, up from 48 in February.

    In the meantime, the fixed-income market shows that US bonds remain offered, as US Treasury bond yields push higher across the short and long ends of the curve. That is bolstering the Greenback, according to the US Dollar Index (DXY), which is up 0.17%, at 103.62.

    EUR/USD Price Analysis: Technical outlook

    The daily chart shows the EUR/USD has finally broken below last Friday’s low of 1.0872, extending its losses below the 1.0870 figure. Nevertheless, buyers could be leaning in the 100-day moving average (DMA) at 1.0860, which, once cleared, could open the door for further downside. The next key dynamic support levels are the 50-DMA at 1.0850 and the 200-DMA at 1.0838. The first key resistance level would be the 1.0900 mark.

     

    EUR/USD TECHNICAL LEVELS

    Overview
    Today last price 1.0869
    Today Daily Change -0.0020
    Today Daily Change % -0.18
    Today daily open 1.0889
     
    Trends
    Daily SMA20 1.0865
    Daily SMA50 1.0852
    Daily SMA100 1.0858
    Daily SMA200 1.0838
     
    Levels
    Previous Daily High 1.09
    Previous Daily Low 1.0873
    Previous Weekly High 1.0964
    Previous Weekly Low 1.0873
    Previous Monthly High 1.0898
    Previous Monthly Low 1.0695
    Daily Fibonacci 38.2% 1.089
    Daily Fibonacci 61.8% 1.0883
    Daily Pivot Point S1 1.0875
    Daily Pivot Point S2 1.0861
    Daily Pivot Point S3 1.0848
    Daily Pivot Point R1 1.0901
    Daily Pivot Point R2 1.0914
    Daily Pivot Point R3 1.0928

     

     

  • 18.03.2024 12:20
    EUR/USD needs to extend through the 1.0900 area to gain a little more ground towards 1.0950 – Scotiabank

    EUR/USD is holding a tight range around the 1.0900 figure. Economists at Scotiabank analyze the pair’s outlook.

    Trend signals are neutral

    ECB Governor de Cos commented that the first interest rate cut could come in June, supporting what appears to be a strengthening consensus among top policymakers that a mid-year ease is most likely.

    EUR/USD is consolidating. EUR gains are well capped around 1.0900 at the moment and spot needs to extend through the figure area to gain a little more ground towards 1.0950. 

    Range support is close by at 1.0875 ahead of 1.0840/1.0850. 

    Trend signals are neutral.

     

  • 18.03.2024 09:13
    EUR/USD could still end the week within the 1.0850/1.0900 range – ING

    EUR/USD hovers slightly below 1.0900. Economists at ING analyze the pair’s outlook.

    PMIs on Thursday could potentially offer some direction to EUR/USD into the weekend

    EUR/USD will be primarily driven by US events this week, although some inputs from the Eurozone calendar should not be overlooked. Final February CPI figures today should not surprise, but Tuesday’s ZEW survey will be interesting to check the state of the struggling German economy. As will PMIs on Thursday, which could potentially offer some direction to EUR/USD into the weekend after the FOMC has been digested. 

    There are also plenty of European Central Bank speakers to hear from, including President Christine Lagarde on Wednesday. 

    Our view on EUR/USD is that it can trade on the soft side into the FOMC, but could still end the week within the 1.0850/1.0900 range.

     

  • 18.03.2024 08:40
    EUR/USD finds floor in 1.0800s as Fed meeting slides into view
    • EUR/USD is under pressure amid fading expectations the Fed will cut interest rates early. 
    • The dot plot from the Fed’s meeting on Wednesday could show a shift from three to two cuts this year, Bloomberg reports. 
    • Such a change would probably cause more negativity for EUR/USD.
       

    EUR/USD has taken a step lower and is now trading within a new range in the 1.0800s following last week’s warmer-than-expected US inflation data, which increased the probability the Federal Reserve (Fed) will need to keep interest rates higher for longer. 

    Since higher interest rates attract more foreign capital inflows, this was positive for the US Dollar (USD), but negative for EUR/USD, which measures one Euro’s (EUR) buying power in USD terms. 

    EUR/USD traders prepare for Fed meeting on Wednesday

    EUR/USD is likely to see heightened volatility on Wednesday when the Fed concludes its March meeting, announces its policy decision and publishes its Summary of Economic Projections (SEP). It is highly unlikely the Fed will announce a rate cut at the meeting, even though that was a possibility a few weeks ago. 

    “The reality is justly sinking in that the Fed is going to take its time,” says Mark Cranfield, an analyst at Bloomberg MLIV.

    His view is backed up by the CME FedWatch Tool, which calculates the market-based probabilities of the Fed making rate cuts. At the time of publication it is calculating a 58% chance the Fed will make one or more 0.25% cuts by June, and 76.5% by July. This has fallen from the 80% for June registered by the tool at the beginning of the month. 

    In the last SEP, the board of governors of the Fed predicted at least three 0.25% interest rate cuts in 2024 in their “dot plot”, however, Bloomberg News says there is now a material possibility that this will be reduced to only two cuts after the March meeting. Such a retrenchment would be viewed as “quite aggressive,” according to Cranfield. As such it would be likely to lead to further weakness for EUR/USD. 

    “A pleasant surprise would be if the Fed were to maintain three dot-plot cuts,” added Cranfield, who suggests such a maintenance of the status quo would be bearish for USD (bullish for EUR/USD). 

    July the new June

    A report published by Bloomberg on Monday shows that after digesting over 900 headlines quoting Fed officials since the beginning of the year, the conclusion is that July actually comes out as more likely as the month when the Fed begins easing, rather than June. 

    If this is so, market expectations will need to shift further away from June, with negative consequences for EUR/USD, all other things being equal. 

    There is little major data out for the Eurozone on Monday. February Consumer Price Index data is a revision of an estimate and unlikely to deviate from the 2.6% preliminary result for headline and 3.1% for Core. 

    Technical Analysis: EUR/USD hovers above abyss

    EUR/USD finds a temporary support as it extends its correction from the 1.0981 March 8 high. 

    The depth of the correction brings into question the sustainability of the hitherto dominant short-term uptrend. 

    Euro vs US Dollar: 4-hour chart

    Price is still above the pivotal 1.0867 level of the previous key swing low. This is likely to be a make-or-break level for the trend. Should prices cross below it would shift the balance of probabilities in favor of a reversal of the uptrend. 

    Such a breakdown would then most probably extend to 1.0795, at the low of the B leg of the prior ABC Measured Move pattern that unfolded higher during February and early March. 

    Alternatively, if the level holds, the short-term uptrend remains intact and likely to resume. Confirmation of a higher high and an extension of the uptrend would come from a break above the 1.0981 highs. 

    After that, tough resistance is expected at the 1.1000 psychological level – a likely bloody battlefield for bulls and bears. 

    A decisive break above 1.1000, however, would open the gates to further gains towards the key resistance level at 1.1139, the December 2023 high. 

    A “decisive” break is one characterized by a long green candle piercing clearly above the level and closing near its high, or three green bars in a row, breaching cleanly above the level.

     

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 18.03.2024 07:28
    EUR/USD to fall if Fed holds rates unchanged for longer – Nordea

    Over the past month, EUR/USD has been trending higher since the bottom at 1.0700 and has been closing in on the 1.1000 level. Economists at Nordea analyze the pair’s outlook.

    The next big move for EUR/USD to be lower in the months to come

    For the USD, later rate cut signals from the Fed should be supportive. 

    We expect the next big move for EUR/USD to be lower in the months to come, and 1.0500 could be in sight again. 

    Moreover, the upcoming liquidity situation in the US could also be supportive for the USD in the upcoming quarter. 

    Overall, it seems EUR/USD will remain range bound in the 1.0500-1.1000 area so long as (expectations for) monetary policy for both do not diverge to a larger degree.

     

  • 18.03.2024 06:10
    EUR/USD Price Analysis: Hovers below the psychological resistance of 1.0900
    • EUR/USD may encounter immediate support around the 38.2% Fibonacci retracement level of 1.0871.
    • Technical analysis indicates a potential confirmation of bullish momentum for the pair.
    • The immediate resistance area is expected near the nine-day EMA at 1.0897 and the psychological level of 1.0900.

    EUR/USD edges lower to near 1.0890 during the Asian market hours on Monday. The pair receives downward pressure as the market adopts caution ahead of the Federal Reserve’s (Fed) interest rate decision.

    The EUR/USD pair could meet the immediate support at 38.2% Fibonacci retracement level of 1.0871, followed by the major support of 1.0850. A break below this level could push the pair to test the further 50.0% retracement level of 1.0838. Further support should have appeared at the psychological level of 1.0800.

    Technical analysis suggests a bullish sentiment for the EUR/USD pair. The 14-day Relative Strength Index (RSI) is positioned above the 50 mark, indicating strength in buying momentum. Additionally, the Moving Average Convergence Divergence (MACD) shows a divergence above the signal line and remains above the centerline. Although a lagging indicator, this alignment indicates a confirmation of the bullish momentum for the EUR/USD pair.

    On the upside, the immediate resistance appears at the nine-day Exponential Moving Average (EMA) at 1.0897, aligned with the psychological level of 1.0900. A break above the latter could lead the EUR/USD pair to navigate the major barrier at 1.0950, followed by the previous week’s high at 1.0963.

    EUR/USD: Daily Chart

    EUR/USD

    Overview
    Today last price 1.0887
    Today Daily Change -0.0002
    Today Daily Change % -0.02
    Today daily open 1.0889
     
    Trends
    Daily SMA20 1.0865
    Daily SMA50 1.0852
    Daily SMA100 1.0858
    Daily SMA200 1.0838
     
    Levels
    Previous Daily High 1.09
    Previous Daily Low 1.0873
    Previous Weekly High 1.0964
    Previous Weekly Low 1.0873
    Previous Monthly High 1.0898
    Previous Monthly Low 1.0695
    Daily Fibonacci 38.2% 1.089
    Daily Fibonacci 61.8% 1.0883
    Daily Pivot Point S1 1.0875
    Daily Pivot Point S2 1.0861
    Daily Pivot Point S3 1.0848
    Daily Pivot Point R1 1.0901
    Daily Pivot Point R2 1.0914
    Daily Pivot Point R3 1.0928

     

     

  • 18.03.2024 01:43
    EUR/USD remains capped under the 1.0900 mark, Fed rate decision eyed
    • EUR/USD edges lower to 1.0885 amid the recovery of USD. 
    • FOMC is expected to hold its key fed funds rate steady at a 5.25%–5.50% range on Wednesday. 
    • ECB’s de Cos said that the central bank could start cutting interest rates in June after a decrease in Eurozone inflation. 
    • The FOMC monetary policy meeting and press conference on Wednesday will be in the spotlight. 

    The EUR/USD pair trades softer below the 1.0900 mark during the early Asian session on Monday. The rebound of the US Dollar (USD) above 103.50 weighs on the major pair. Investors await the US Federal Open Market Committee's (FOMC) interest rate decision on Wednesday, with no change in rate expected. At press time, EUR/USD is trading at 1.0885, down 0.03% on the day. 

    The University of Michigan showed on Friday that the Consumer Sentiment Index dropped to 76.5 in March compared to the previous reading and the estimation of 76.9. The UoM one-year and five-year inflation expectations were unchanged at 3.0% and 2.9%, respectively. Meanwhile, US Industrial Production climbed to 0.1% MoM in February from a 0.5% MoM drop in January.

    The FOMC is widely expected to hold its key fed funds rate steady at a 22-year high of a 5.25%–5.50% range on Wednesday as Fed officials want to see more evidence of inflation data to ensure it returns to its 2% target before starting to cut the interest rates. That being said, the high-for-longer US rate narrative might lift the US Dollar (USD) and act as a headwind for the EUR/USD pair. 

    On the Euro front, the European Central Bank (ECB) kept borrowing costs at record highs at its March meeting, but policymakers indicated they were discussing a first rate cut. The ECB policymaker Pablo Hernandez de Cos said on Sunday that the central bank left borrowing costs at a record high this month but said it had made good progress in bringing down inflation and has started a preliminary discussion about monetary easing. He added that the central bank could start cutting interest rates in June after a decrease in Eurozone inflation. 

    The Eurozone Harmonized Index of Consumer Prices (HICP) and Trade Balance are due on Monday. On Tuesday, the ZEW Survey from Germany and the Eurozone will be released. The attention will shift to the FOMC interest rate decision on Wednesday. Traders will take cues from the data and find trading opportunities around the EUR/USD pair. 

    EUR/USD

    Overview
    Today last price 1.0884
    Today Daily Change -0.0005
    Today Daily Change % -0.05
    Today daily open 1.0889
     
    Trends
    Daily SMA20 1.0865
    Daily SMA50 1.0852
    Daily SMA100 1.0858
    Daily SMA200 1.0838
     
    Levels
    Previous Daily High 1.09
    Previous Daily Low 1.0873
    Previous Weekly High 1.0964
    Previous Weekly Low 1.0873
    Previous Monthly High 1.0898
    Previous Monthly Low 1.0695
    Daily Fibonacci 38.2% 1.089
    Daily Fibonacci 61.8% 1.0883
    Daily Pivot Point S1 1.0875
    Daily Pivot Point S2 1.0861
    Daily Pivot Point S3 1.0848
    Daily Pivot Point R1 1.0901
    Daily Pivot Point R2 1.0914
    Daily Pivot Point R3 1.0928

     



     

  • 15.03.2024 15:38
    EUR/USD: Euro set to depreciate towards the end of the year – NBF

    EUR/USD has seen some movement in the first two months of the year but remains relatively rangebound between the 1.0750 and 1.1000 levels. Economists at the National Bank of Canada analyze the pair’s outlook.

    Some volatility for the Euro expected over the next quarters

    We expect some volatility for the Euro over the next quarters, especially as both the Federal Reserve and the European Central Bank policy paths become clearer. 

    Nonetheless, we see the common currency depreciating towards the end of the year.

  • 15.03.2024 09:30
    EUR/USD trades at make-or-break level after Thursday’s sell-off
    • EUR/USD has fallen to the 1.0800s, close to a critical level for the short-term trend.
    • Further weakness could tip the near-term outlook in favor of bears. 
    • Empire State Manufacturing, Michigan Sentiment, US Industrial Production and commentary from ECB’s Nagel round off the week.

    EUR/USD is trading in the 1.0800s on the last day of the week after taking a step down from its previous range in the 1.0900s. The catalyst seems to have been Thursday’s US macro data, which dented optimism in the Federal Reserve (Fed) implementing early interest-rate cuts. 

    Thursday’s data showed the US Producer Price Index (PPI) unexpectedly rose 1.6% YoY in February after an upwardly-revised 1.0% increase in January, easily beating consensus estimates of 1.1%.

    Along with lower-than-expected Initial Jobless Claims and a rise – albeit not as much as predicted – in Retail Sales to 0.6% from a negative, revised-down 1.1% previously, the data suggested the US economy remains hotter than expected. 

    It probably means the Fed will have to keep interest rates higher for longer. This  is negative for EUR/USD but positive for the US Dollar (USD) since higher interest rates attract greater inflows of foreign capital. 

    EUR/USD: Talking heads at ECB cluster around summer

    On Thursday, a long line-up of European Central Bank (ECB) policymakers appeared in public with some of them sharing their views about when the ECB should start cutting interest rates. 

    The official line, provided by Christine Lagarde at the press conference following the March ECB meeting, was that the Governing Council would review interest rates in June.

    Following the meeting, however, Governor of the Bank of France Francois Villeroy de Galhau stirred up markets by hinting that an interest-rate cut might come as early as April.

    His comments suggested that two camps might be forming at the ECB, favoring either a spring or summer rate cut. 

    On Wednesday, the Governor of the Bank of Austria and ECB Governing Council member Robert Holzmann joined the June camp. 

    Early Thursday ECB Governing Council member Yannis Stournaras seemed to back the case for a spring rate cut, adding that he didn’t buy the argument that the ECB could not cut rates before the Fed, and that four rate cuts in 2024 seemed reasonable.

    Also on Thursday, ECB Governing Council member Klaas Knot said he believed the ECB would start cutting interest rates in June.

    Vice-President of the ECB Luis de Guindos, speaking in Barcelona on Thursday, said “The ECB should have sufficient information in June to begin making decisions about monetary policy,” according to Bloomberg News. 

    On the horizon

    Friday’s economic calendar shows no major economic data releases or events that could rock EUR/USD but the US Empire State Manufacturing Index, February Industrial Production figures out of the US and the preliminary Michigan Consumer Sentiment Index may offer traders short-term opportunities.  

    For the Euro, Bundesbank President Joachim Nagel is scheduled to give a press conference to present the research project "From the Reichsbank to the Bundesbank" in Frankfurt, Germany. It is possible he may comment on ECB policy at the event. Later on, ECB chief economist and board member Philip Lane will also speak. 

    Technical Analysis: EUR/USD reaches critical trend-determination level

    EUR/USD continues correcting back, falling into the 1.0800s, after peaking at 1.0981 on March 8. 

    After Thursday’s sell-off, the correction is now so deep it brings into question the sustainability of the hitherto dominant short-term uptrend. 

    Euro vs US Dollar: 4-hour chart

    Bears have now pushed price down to a few pips above the pivotal 1.0867 level of the previous key swing low, highlighted as the make-or-break level for the trend. Should they push price below this level it would start to shift the balance of probabilities in favor of a reversal of the uptrend. 

    Such a breakdown would then most probably see a continuation down to 1.0795, at the low of the B leg of the prior ABC Measured Move pattern that unfolded higher during February and early March. 

    Alternatively, if the level holds, the short-term uptrend could resume. Confirmation of a higher high and an extension of the uptrend would come from a break above the 1.0981 highs. 

    After that, tough resistance is expected at the 1.1000 psychological level, which is likely to be the scene of a fierce battle between bulls and bears. 

    A decisive break above 1.1000, however, would open the gates to further gains towards the key resistance level at 1.1139, the December 2023 high. 

    By “decisive” it is meant a break characterized by a long green candle piercing clearly above the level and closing near its high, or three green bars in a row, breaching the level.

     

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

     

  • 15.03.2024 09:00
    EUR/USD could test 1.0800 in the coming days – ING

    EUR/USD is holding under 1.0900. Economists at ING analyze the pair’s outlook.

    Dovish ECB commentary continues

    The lack of market-moving data releases left EUR/USD to being driven by the dollar rebound, while some dovish comments by European Central Bank officials have hardly given markets a reason to hang on to the Euro.

    EUR/USD is trading at more sustainable levels now, and we think it can remain under modest pressure into the FOMC meeting. 

    There are a few key moving average supports between 1.0840 and 1.0860: if broken, we could see the pair test 1.0800 in the coming days.

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