EUR/USD Forecast: Euro needs to surpass 1.0585 for 1.0600 and beyond
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UPGRADE- The US Dollar slides in response to the FOMC November meeting.
- Risk appetite and lower yields put pressure on the Greenback.
- The EUR/USD rebounds back towards the 20-day SMA.
The EUR/USD recovered during the American session, surpassing the 1.0570 level. This upward movement was primarily influenced by a broad-based weakness in the US Dollar. Although the Euro is not entirely out of a challenging situation, it managed to hold above a significant support level, and shows potential for further gains as the Asian session approaches.
The Federal Reserve (Fed) kept interest rates unchanged at the October 31/November 1 meeting. While they left the door open for future tightening, the likelihood of further rate hikes currently appears low. US data, particularly inflation figures, will be crucial in shaping expectations.
In terms of recent data, the ADP Employment Report showed an increase in private payrolls by 113,000 in October, falling short of the expected 150,000 but surpassing September's figure of 89,000. The ISM Manufacturing PMI unexpectedly dropped to 46.7 in October. However, the JOLTS Jobs Opening data exceeded expectations at 9.55 million. On Thursday, the weekly Jobless Claims is due and on Friday, the NFP.
Despite the data releases and the statements from the FOMC and Powell, the impact on the market has been limited. The overall tone remains essentially unchanged. The US Dollar lost momentum as US yields declined further, while stock markets on Wall Street extended weekly gains.
If the US Dollar continues to weaken, the EUR/USD could extend its upside momentum, potentially surpassing not only 1.0600 but also moving higher. However, fundamental factors still favor the US Dollar, which could limit the upside potential for the Euro.
EUR/USD short-term technical outlook
On the daily chart, the EUR/USD is currently hovering around the 20-day Simple Moving Average (SMA) at 1.0570. The pair remains within a range, with upside resistance provided by the 55-day SMA at 1.0660. A daily close above this level would potentially clear the path for further gains.
On the 4-hour chart, the pair encounters key SMAs between 1.0577 and 1.0586. To improve the short-term outlook, the Euro must break above this zone, opening the way towards 1.0600 and potentially higher levels. However, if the pair fails to rise above this zone, another test of the critical support level at 1.0520 seems likely. A consolidation below 1.0520 would weaken the Euro, with the next target around 1.0485.
- The US Dollar slides in response to the FOMC November meeting.
- Risk appetite and lower yields put pressure on the Greenback.
- The EUR/USD rebounds back towards the 20-day SMA.
The EUR/USD recovered during the American session, surpassing the 1.0570 level. This upward movement was primarily influenced by a broad-based weakness in the US Dollar. Although the Euro is not entirely out of a challenging situation, it managed to hold above a significant support level, and shows potential for further gains as the Asian session approaches.
The Federal Reserve (Fed) kept interest rates unchanged at the October 31/November 1 meeting. While they left the door open for future tightening, the likelihood of further rate hikes currently appears low. US data, particularly inflation figures, will be crucial in shaping expectations.
In terms of recent data, the ADP Employment Report showed an increase in private payrolls by 113,000 in October, falling short of the expected 150,000 but surpassing September's figure of 89,000. The ISM Manufacturing PMI unexpectedly dropped to 46.7 in October. However, the JOLTS Jobs Opening data exceeded expectations at 9.55 million. On Thursday, the weekly Jobless Claims is due and on Friday, the NFP.
Despite the data releases and the statements from the FOMC and Powell, the impact on the market has been limited. The overall tone remains essentially unchanged. The US Dollar lost momentum as US yields declined further, while stock markets on Wall Street extended weekly gains.
If the US Dollar continues to weaken, the EUR/USD could extend its upside momentum, potentially surpassing not only 1.0600 but also moving higher. However, fundamental factors still favor the US Dollar, which could limit the upside potential for the Euro.
EUR/USD short-term technical outlook
On the daily chart, the EUR/USD is currently hovering around the 20-day Simple Moving Average (SMA) at 1.0570. The pair remains within a range, with upside resistance provided by the 55-day SMA at 1.0660. A daily close above this level would potentially clear the path for further gains.
On the 4-hour chart, the pair encounters key SMAs between 1.0577 and 1.0586. To improve the short-term outlook, the Euro must break above this zone, opening the way towards 1.0600 and potentially higher levels. However, if the pair fails to rise above this zone, another test of the critical support level at 1.0520 seems likely. A consolidation below 1.0520 would weaken the Euro, with the next target around 1.0485.
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