EUR/USD Forecast: Euro could extend recovery once it clears 1.1650
- EUR/USD trades in positive territory above 1.1600 following Tuesday's recovery.
- The broad-based USD weakness helps the pair stretch higher.
- Technical buyers could remain interested once EUR/USD stabilizes above 1.1650.
EUR/USD benefited from the renewed US Dollar (USD) weakness on Tuesday and closed the day in positive territory. The pair preserves its recovery momentum and advances toward 1.1650 in the European session on Wednesday.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.24% | -0.25% | -0.36% | -0.01% | -0.50% | -0.04% | -0.20% | |
| EUR | 0.24% | 0.04% | -0.14% | 0.21% | -0.23% | 0.14% | 0.04% | |
| GBP | 0.25% | -0.04% | -0.18% | 0.21% | -0.26% | 0.10% | 0.06% | |
| JPY | 0.36% | 0.14% | 0.18% | 0.34% | -0.12% | 0.17% | 0.27% | |
| CAD | 0.00% | -0.21% | -0.21% | -0.34% | -0.49% | -0.11% | -0.15% | |
| AUD | 0.50% | 0.23% | 0.26% | 0.12% | 0.49% | 0.36% | 0.31% | |
| NZD | 0.04% | -0.14% | -0.10% | -0.17% | 0.11% | -0.36% | -0.04% | |
| CHF | 0.20% | -0.04% | -0.06% | -0.27% | 0.15% | -0.31% | 0.04% |
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).
Federal Reserve (Fed) Chairman Jerome Powell's neutral tone and growing concerns over a further escalation of the US-China trade conflict caused the USD to come under pressure in the second half of the day on Tuesday.
While speaking at the National Associations for Business Economics (NABE) Annual Meeting in Philadelphia on Tuesday, Powell acknowledged that downside risks to the labor market had risen, but also noted that there is a risk that the slow pass-through of tariffs could start to look like persistent inflation. "The future path of monetary policy will be driven by data and risk assessments," he reiterated.
In the meantime, US President Donald Trump said in a social media post that they could start terminating some trade ties with China, adding that he believes China is causing difficulty for American farmers by purposefully not buying soybeans from the US.
The economic calendar will not offer any high-impact macroeconomic data releases later in the day. In case Trump, or other White House officials, switch to a softer tone on trade-related issues with China, the USD could regain its traction and make it difficult for EUR/USD to extends its recovery. On the flip side, the pair is likely to hold its ground if there are no signs of a de-escalation of the US-China conflict.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart rises toward 60, pointing to an increasing buyer interest.
On the upside, the 100-day Simple Moving Average aligns as a key resistance level at 1.1650. In case EUR/USD rises above this level and starts using it as support, the pair could gather bullish momentum. In this scenario, 1.1700 (Fibonacci 38.2% retracement of the latest uptrend, 200-period SMA) could be seen as the next hurdle ahead of 1.1765 (Fibonacci 23.6% retracement).
Looking south, support levels could be spotted at 1.1580 (Fibonacci 61.8% retracement), 1.1550 (static level) and 1.1500 (Fibonacci 78.6% retracement).
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.
