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- EUR/USD bounced on Friday, remains capped below 1.0800
EUR/USD bounced on Friday, remains capped below 1.0800
- EUR/USD found some room higher but still lacks upside momentum.
- Final German HICP and CPI inflation brought no surprises.
- US CPI inflation, EU GDP figures slated for next week.
The EUR/USD found some room on the high side on Friday, continuing a near-term recovery. However, the pair remains firmly planted on the low side of technical barriers and remains pinned below the 1.0800 price handle.
German inflation figures brought nothing new to the table, confirming initial flash prints, and an adjustment by the US Bureau of Labor Statistics (BLS) made anticipated changes to how seasonal adjustment is calculated in US Consumer Price Index (CPI) figures. Markets jostled after the BLS adjustment, but US inflation figures saw little change, keeping markets on-balance for Friday.
Daily digest market movers: EUR/USD continues slow grind higher as technical ceiling weighs
- Germany’s final Harmonized Index of Consumer Price (HICP) showed no changes from preliminary prints, with the annualized German inflation rate through January holding at 3.1%.
- The US BLS made changes to how seasonal adjustment works for US CPI numbers, with a slight rise in annualized inflation getting offset by a near-term decline after calculations got adjusted.
- US December monthly CPI revised to 0.2% from 0.3%
- Next week brings a fresh print of US CPI inflation, with the YoY CPI through January expected to tick down from 3.4% to 3.0%.
- US CPI inflation slated for Tuesday, European Gross Domestic Product (GDP) figures due Wednesday.
- Pan-European GDP growth is expected to remain pinned in low territory.
- YoY quarterly EU GDP is forecast to print at 0.1%, in-line with the previous annualized quarterly print.
Euro price today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.09% | -0.14% | 0.01% | -0.36% | 0.07% | -0.63% | 0.12% | |
| EUR | 0.10% | -0.04% | 0.11% | -0.27% | 0.17% | -0.54% | 0.22% | |
| GBP | 0.14% | 0.04% | 0.15% | -0.23% | 0.20% | -0.49% | 0.26% | |
| CAD | -0.02% | -0.12% | -0.16% | -0.39% | 0.05% | -0.64% | 0.10% | |
| AUD | 0.37% | 0.27% | 0.22% | 0.38% | 0.43% | -0.26% | 0.48% | |
| JPY | -0.06% | -0.16% | -0.19% | -0.06% | -0.45% | -0.67% | 0.07% | |
| NZD | 0.63% | 0.53% | 0.48% | 0.64% | 0.26% | 0.70% | 0.74% | |
| CHF | -0.15% | -0.24% | -0.28% | -0.13% | -0.51% | -0.08% | -0.77% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).
Technical analysis: EUR/USD struggles to grow legs beneath technical recovery
The EUR/USD remains pinned on the south side of the 200-hour Simple Moving Average (SMA) just beneath 1.0800. Although the pair continues to recover into the upside from the early week’s bottom near 1.0725, topside momentum remains capped, with longer-term technical patterns remaining decidedly bearish.
Despite posting three straight days of gains and on pace for a fourth, the EUR/USD remains on the bearish side of the 200-day SMA at 1.0833. The pair is still down over 3% from late December’s peak of 1.1140, and Euro bidders are struggling to lift the Euro off the floor of a nearly 4% decline into January’s bottom bids of 1.0722.
EUR/USD hourly chart
EUR/USD daily chart
Euro FAQs
What is the Euro?
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%).
What is the ECB and how does it impact the Euro?
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.
How does inflation data impact the value of the Euro?
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.
How does economic data influence the value of the Euro?
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.
How does the Trade Balance impact the Euro?
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.
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