EUR/USD Forecast: Bulls encouraged as Euro stabilizes above key technical area
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UPGRADE- EUR/USD stabilized near 1.0600 after posting small gains on Wednesday.
- The near-term technical picture points to a bullish tilt.
- A continuation of Wednesday's risk rally could help the pair push higher.
EUR/USD made a sharp U-turn in the American session on Wednesday and closed modestly higher after falling toward 1.0500 earlier in the day. The pair preserved its recovery momentum and advanced to the 1.0600 area in the early European session on Thursday.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.40% | -0.50% | -0.31% | -1.52% | 0.37% | -1.52% | 0.26% | |
| EUR | 0.44% | -0.05% | 0.14% | -1.08% | 0.81% | -1.04% | 0.73% | |
| GBP | 0.46% | 0.05% | 0.15% | -1.04% | 0.87% | -1.03% | 0.76% | |
| CAD | 0.33% | -0.10% | -0.19% | -1.20% | 0.68% | -1.21% | 0.59% | |
| AUD | 1.49% | 1.08% | 1.03% | 1.18% | 1.90% | 0.01% | 1.78% | |
| JPY | -0.36% | -0.83% | -0.78% | -0.74% | -1.95% | -1.90% | -0.13% | |
| NZD | 1.49% | 1.06% | 0.99% | 1.18% | -0.01% | 1.86% | 1.75% | |
| CHF | -0.26% | -0.66% | -0.76% | -0.58% | -1.78% | 0.11% | -1.78% |
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).
The US Dollar came under heavy selling pressure late Wednesday as the Federal Reserve (Fed) failed to convince markets that they could still opt for one more rate increase in December.
The Fed left the policy rate unchanged at 5.25%-5.5% as anticipated and the policy statement read that policymakers will take a range of economic factors into account when determining the extent of possible additional policy firming. In the post-meeting press conference, Chairman Jerome Powell refrained from confirming a no change in the policy rate this year but acknowledged that rising bond yields were causing financial conditions to tighten.
Commenting on the Fed event, "overall, we think it is more likely that interest rates will not be raised further. This is because the central bank has been very cautious in recent weeks, despite some surprisingly strong data," Commerzbank Research analysts said. According to the CME Group FedWatch Tool, markets are currently pricing in a 20% chance that the Fed will hike again in December.
In the Fed aftermath, Wall Street's main indexes registered strong gains. At the time of press, US stock index futures were up between 0.3% and 0.7%, while the Euro Stoxx 50 Index was up more than 1%. In case risk flows continue to dominate the action in the second half of the day, EUR/USD could continue to stretch higher, at least until Friday's October jobs report from the US.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart rose above 50 and EUR/USD closed the last three 4-hour candles above the 100-period and the 200-period Simple Moving Average (SMA), reflecting the bullish shift in the short-term outlook.
On the upside, 1.0640 (Fibonacci 38.2% retracement of the latest downtrend) aligns as first resistance before 1.0660 (static level) and 1.0700 (psychological level, Fibonacci 50% retracement).
In case EUR/USD returns below 1.0570-1.0580 (100-period SMA, 200-period SMA, Fibonacci 23.6% retracement), technical sellers could take action. In this scenario, 1.0530 (static level) could act as interim support before 1.0500 (psychological level).
- EUR/USD stabilized near 1.0600 after posting small gains on Wednesday.
- The near-term technical picture points to a bullish tilt.
- A continuation of Wednesday's risk rally could help the pair push higher.
EUR/USD made a sharp U-turn in the American session on Wednesday and closed modestly higher after falling toward 1.0500 earlier in the day. The pair preserved its recovery momentum and advanced to the 1.0600 area in the early European session on Thursday.
Euro price this week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | -0.40% | -0.50% | -0.31% | -1.52% | 0.37% | -1.52% | 0.26% | |
| EUR | 0.44% | -0.05% | 0.14% | -1.08% | 0.81% | -1.04% | 0.73% | |
| GBP | 0.46% | 0.05% | 0.15% | -1.04% | 0.87% | -1.03% | 0.76% | |
| CAD | 0.33% | -0.10% | -0.19% | -1.20% | 0.68% | -1.21% | 0.59% | |
| AUD | 1.49% | 1.08% | 1.03% | 1.18% | 1.90% | 0.01% | 1.78% | |
| JPY | -0.36% | -0.83% | -0.78% | -0.74% | -1.95% | -1.90% | -0.13% | |
| NZD | 1.49% | 1.06% | 0.99% | 1.18% | -0.01% | 1.86% | 1.75% | |
| CHF | -0.26% | -0.66% | -0.76% | -0.58% | -1.78% | 0.11% | -1.78% |
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).
The US Dollar came under heavy selling pressure late Wednesday as the Federal Reserve (Fed) failed to convince markets that they could still opt for one more rate increase in December.
The Fed left the policy rate unchanged at 5.25%-5.5% as anticipated and the policy statement read that policymakers will take a range of economic factors into account when determining the extent of possible additional policy firming. In the post-meeting press conference, Chairman Jerome Powell refrained from confirming a no change in the policy rate this year but acknowledged that rising bond yields were causing financial conditions to tighten.
Commenting on the Fed event, "overall, we think it is more likely that interest rates will not be raised further. This is because the central bank has been very cautious in recent weeks, despite some surprisingly strong data," Commerzbank Research analysts said. According to the CME Group FedWatch Tool, markets are currently pricing in a 20% chance that the Fed will hike again in December.
In the Fed aftermath, Wall Street's main indexes registered strong gains. At the time of press, US stock index futures were up between 0.3% and 0.7%, while the Euro Stoxx 50 Index was up more than 1%. In case risk flows continue to dominate the action in the second half of the day, EUR/USD could continue to stretch higher, at least until Friday's October jobs report from the US.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart rose above 50 and EUR/USD closed the last three 4-hour candles above the 100-period and the 200-period Simple Moving Average (SMA), reflecting the bullish shift in the short-term outlook.
On the upside, 1.0640 (Fibonacci 38.2% retracement of the latest downtrend) aligns as first resistance before 1.0660 (static level) and 1.0700 (psychological level, Fibonacci 50% retracement).
In case EUR/USD returns below 1.0570-1.0580 (100-period SMA, 200-period SMA, Fibonacci 23.6% retracement), technical sellers could take action. In this scenario, 1.0530 (static level) could act as interim support before 1.0500 (psychological level).
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