EUR/USD Forecast: Euro clings to bullish stance in quiet holiday trading
- EUR/USD consolidates weekly gains near 1.1600 on Thursday.
- The technical outlook suggests that the bullish stance remains intact in the near term.
- Markets are likely to remain calm amid the Thanksgiving Day holiday in the US.
EUR/USD holds steady at around 1.1600 in the European session on Thursday after closing in positive territory on Wednesday. While the pair's technical outlook highlights a bullish bias, additional gains could be hard to come by with trading volumes thinning out amid the Thanksgiving Day holiday in the US.
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 US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.61% | -0.83% | -0.14% | -0.42% | -0.99% | -1.73% | -0.41% | |
| EUR | 0.61% | -0.23% | 0.47% | 0.19% | -0.41% | -1.13% | 0.20% | |
| GBP | 0.83% | 0.23% | 0.68% | 0.42% | -0.18% | -0.90% | 0.43% | |
| JPY | 0.14% | -0.47% | -0.68% | -0.28% | -0.91% | -1.72% | -0.27% | |
| CAD | 0.42% | -0.19% | -0.42% | 0.28% | -0.57% | -1.30% | 0.00% | |
| AUD | 0.99% | 0.41% | 0.18% | 0.91% | 0.57% | -0.72% | 0.61% | |
| NZD | 1.73% | 1.13% | 0.90% | 1.72% | 1.30% | 0.72% | 1.35% | |
| CHF | 0.41% | -0.20% | -0.43% | 0.27% | -0.01% | -0.61% | -1.35% |
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).
In the early trading hours of the American session on Wednesday, the US Dollar (USD) managed to stay resilient against its rivals, supported by the latest data releases.
The US Department of Labor reported that there were 216,000 Initial Jobless Claims in the week ending November 22, a decrease of 6,000 from the previous week's revised level. Additionally, the US Census Bureau announced that Durable Goods Orders rose by 0.5% in September, beating the market expectation for an increase of 0.3%.
Nevertheless, the risk-positive market atmosphere made it difficult for the USD to preserve its strength in the late American session and allowed EUR/USD to end the day marginally higher.
The economic calendar will not offer any high-tier data releases that could impact the pair's action in a significant way on Thursday. In the second half of the day, both stock and bond markets in the US will remain closed. On Friday, those markets will open at the regular hours but they will close early.
EUR/USD Technical Analysis:
The 20-period Simple Moving Average (SMA) has turned higher at 1.1561, above the falling 50-period SMA at 1.1555, while the 100-period SMA edges up to 1.1563 and the 200-period SMA flattens near 1.1585. Price holds above all these averages, keeping the intraday tone biased to the upside. The Relative Strength Index (RSI) stands at 60, reflecting firm bullish momentum without overbought signals.
Measured from the 1.1885 high to the 1.1470 low, the 23.6% retracement at 1.1568 has been reclaimed and now acts as support, followed by 1.1550 (static level, 50-period SMA) and 1.1500 (static level, round level). Immediate resistance aligns at the 38.2% retracement at 1.1629, ahead of the the 50% retracement at 1.1680.
(The technical analysis of this story was written with the help of an AI tool)
Euro FAQs
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%).
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.
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.
