EUR/USD Forecast and News
EUR/USD keeps the constructive tone near 1.0800
EUR/USD started the week in a positive note amidst the Dollar’s inconclusive price action, altogether motivating the pair to attempt a move to the proximity of the 1.0800 region, where the 200-day SMA also converges.
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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 interim 100-day SMA of 1.0838 and the April top of 1.0885 (April 9). North of here lies the March peak of 1.0981 (March 8), followed by the weekly high of 1.0998 (January 11), all before hitting the psychological barrier 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), which comes before the weekly low of 1.0495 (October 13, 2023). Once this area is reached, a journey to the 2023 low of 1.0448 (October 3) is possible before reaching the round milestone of 1.0400.
The 4-hour chart shows the continuation of the upward trend, with the pair now initially aiming for 1.0812, ahead of 1.0885. Meanwhile, 1.0750 provides early support, ahead of 1.0649 and 1.0601. The relative strength index (RSI) looked stable around 61.
Fundamental Overview
The indecisive movement of the US Dollar (USD) seems to have been enough to bolster the continuation of the march north in EUR/USD at the beginning of the week. The pair, however, failed to retest or surpass the key 1.0800 barrier amidst its fourth consecutive daily advance.
This uncertain momentum of the Greenback coincided with investors' evaluation of the recent decision by the Federal Reserve (Fed) to maintain its interest rates unchanged at 5.25%–5.50% at its May 1 event and the somewhat disheartening prints from April’s Nonfarm Payrolls (+175K).
During the Fed’s event, the Committee reiterated its openness to rate cuts while expressing concerns regarding inflation and potential disruptions to economic stability. Additionally, the central bank signalled a slowdown in the pace of balance sheet reduction, contrasting with previous warnings.
Extra comments from Chair Jerome Powell at his press conference added to the recent pressure on the Dollar, as he suggested that the next policy adjustment is unlikely to involve a rate hike.
In the longer term, weakness in the Greenback is expected to be temporary due to delayed expectations of a potential interest rate cut by the Fed later this year.
Meanwhile, US yields continued their descent, while the broader macroeconomic landscape continued to highlight the disparity in monetary policies between the Fed and other G10 central banks, notably the European Central Bank (ECB).
Recent statements from ECB board members hinted at the possibility of the ECB initiating its easing cycle in June, fueling speculation about three interest rate cuts (or 75 basis points) for the rest of the year.
Looking forward, the relatively subdued economic fundamentals in the Eurozone, coupled with the resilience of the US economy, reinforce expectations for a stronger Dollar in the medium term, particularly considering the increasing probability of the ECB cutting rates well ahead of the Fed.
Given this scenario, further weakness in EUR/USD should not be ruled out 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.
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Editors' picks
EUR/USD keeps the constructive tone near 1.0800
EUR/USD started the week in a positive note amidst the Dollar’s inconclusive price action, altogether motivating the pair to attempt a move to the proximity of the 1.0800 region, where the 200-day SMA also converges.
GBP/USD closes in on 1.2600 as risk mood improves
Following Friday's volatile action, GBP/USD pushes higher toward 1.2600 on Monday. Soft April jobs report from the US and the improvement seen in risk mood make it difficult for the US Dollar to gather strength.
USD/JPY consolidates below 154.00 in Japan’s holiday-truncated week
USD/JPY holds gains near 154.00 despite soft US Dollar. Weak US data builds pressure on the US Dollar. The speculation for Japan intervention to support the Japanese Yen remains firm.
Gold holds on to modest gains around $2,320
Gold trades decisively higher on the day above $2,320 in the American session. Retreating US Treasury bond yields after weaker-than-expected US employment data and escalating geopolitical tensions help XAU/USD stretch higher.
Crude Oil continues to soften on Middle East ceasefire talks, WTI falls to $78
West Texas Intermediate (WTI) US Crude Oil futures fell on Monday after headlines of a possible ceasefire in the ongoing conflict between Israel and Palestinian Hamas. Crude Oil markets will also be keeping an eye out for weekly production updates from the US as output threatens to outpace demand.
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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.