EUR/USD Forecast: Euro buyers could take action once 1.1430 resistance fails
- EUR/USD trades marginally higher on the day near 1.1400 in the European morning.
- Stock and bond markets in the US will remain closed on Monday.
- The technical outlook suggests that the bullish bias remains intact.
EUR/USD gained more than 1.5% in the previous week and snapped a four-week losing streak. The pair holds its ground in the early European session on Monday and trades near 1.1400.
Euro PRICE Last 7 days
The table below shows the percentage change of Euro (EUR) against listed major currencies last 7 days. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.79% | -2.09% | -1.73% | -1.91% | -1.69% | -2.28% | -1.83% | |
| EUR | 1.79% | -0.33% | 0.13% | -0.06% | 0.23% | -0.44% | -0.03% | |
| GBP | 2.09% | 0.33% | 0.16% | 0.27% | 0.56% | -0.12% | 0.29% | |
| JPY | 1.73% | -0.13% | -0.16% | -0.18% | 0.20% | -0.37% | -0.06% | |
| CAD | 1.91% | 0.06% | -0.27% | 0.18% | 0.24% | -0.39% | 0.02% | |
| AUD | 1.69% | -0.23% | -0.56% | -0.20% | -0.24% | -0.66% | -0.26% | |
| NZD | 2.28% | 0.44% | 0.12% | 0.37% | 0.39% | 0.66% | 0.41% | |
| CHF | 1.83% | 0.03% | -0.29% | 0.06% | -0.02% | 0.26% | -0.41% |
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 US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The US Dollar (USD) struggled to find demand last week amid growing concerns over United States (US) President Donald Trump's tax bill causing the federal debt to remain on an unsustainable path. Additionally, Trump's renewed tariff threats further weighed on the USD and helped EUR/USD push higher heading into the weekend.
President Trump said on Friday that their discussions with the European Union (EU) were going nowhere and noted that he is recommending a "straight 50% tariff" on imports from the EU. Moreover, Trump noted that he is planning to impose tariffs on Apple iPhones not manufactured in the US and suggested that they could put Samsung products under the same application.
On Sunday, Trump announced that he agreed to extend the tariff deadline on European imports until July 9 after he held a phone conversation with European Commission President Ursula von der Leyen. This headline failed to help the USD stage a rebound to start the week.
Financial markets in the US will remain closed in observance of the Memorial Day holiday on Monday. Hence, thin trading volumes could cause EUR/USD's action to remain subdued in the second half of the day.
On Tuesday, the European Commission will release consumer and business sentiment data. Later in the day, the US economic calendar will feature Durable Goods Orders data for April and the Conference Board's Consumer Confidence Index for May.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart edged slightly lower after rising above 70, suggesting that EUR/USD's latest pullback was a technical correction rather than the beginning of a reversal.
On the upside, 1.1430 (static level) aligns as immediate resistance ahead of 1.1500 (static level, round level) and 1.1575 (April 21 high). Looking south, supports could be seen at 1.1300 (200-period Simple Moving Average (SMA), static level) and 1.1260-1.1270 (Fibonacci 38.2% retracement of the latest uptrend, 100-period SMA).
Euro FAQs
The Euro is the currency for the 19 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.
Premium
You have reached your limit of 3 free articles for this month.
Start your subscription and get access to all our original articles.
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
