- EUR/USD trades in a tight channel below 1.1100 on Tuesday.
- The pair could correct lower if 1.1060 support fails.
- The risk perception is likely to drive the USD's valuation in the absence of high-tier data releases.
EUR/USD started the new week on a firm footing and gained 0.5% for the second consecutive trading day on Monday. After touching its highest level since December near 1.1090 early Tuesday, the pair retreated slightly and was last seen trading below 1.1080.
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 | -0.49% | -0.49% | -0.88% | -0.50% | -0.92% | -1.49% | -0.65% | |
| EUR | 0.49% | -0.08% | -0.34% | -0.00% | -0.52% | -1.17% | -0.19% | |
| GBP | 0.49% | 0.08% | -0.44% | 0.04% | -0.45% | -1.03% | -0.11% | |
| JPY | 0.88% | 0.34% | 0.44% | 0.31% | -0.08% | -0.50% | 0.09% | |
| CAD | 0.50% | 0.00% | -0.04% | -0.31% | -0.45% | -0.92% | -0.19% | |
| AUD | 0.92% | 0.52% | 0.45% | 0.08% | 0.45% | -0.50% | 0.34% | |
| NZD | 1.49% | 1.17% | 1.03% | 0.50% | 0.92% | 0.50% | 0.88% | |
| CHF | 0.65% | 0.19% | 0.11% | -0.09% | 0.19% | -0.34% | -0.88% |
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 upbeat risk mood didn't allow the US Dollar (USD) to stay resilient against its major rivals on Monday and opened the door for another leg higher in EUR/USD. Meanwhile, dovish comments from Federal Reserve (Fed) Bank of Minneapolis President Neel Kashkari put additional weight on the USD.
"The balance of risks has shifted more towards labor market and away from inflation side of our dual mandate," Kashkari told the Wall Street Journal and said it will be appropriate to debate a rate cut at the September meeting.
Eurostat confirmed the Harmonized Index of Consumer Prices rose 2.6% on a yearly basis in July, matching the initial estimate and the market expectation.
The economic calendar will not offer any high-impact data releases on Tuesday. Although there are several Fed policymakers scheduled to speak later in the day, they are unlikely to touch on the monetary policy outlook. Hence, investors could react to changes in risk perception. A continuation of the risk rally is likely to hurt the USD and allow EUR/USD to stretch higher.
EUR/USD Technical Analysis
The Relative Strength Index edges lower toward 70 after touching 80 on Monday, suggesting that the pair stages a technical correction, while maintaining the bullish stance in the near-term outlook.
1.1060 (static level, former resistance) aligns as first support before 1.1030 (ascending trend line) and 1.1000 (psychological level, static level).
On the upside, first resistance is located at 1.1100 (psychological level, static level) ahead of 1.1140 (December 28, 2023, high).
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD clings to gains near 1.0950 on US Dollar weakness
EUR/USD stays in positive territory near 1.0950 on Tuesday as the US Dollar (USD) struggles to find demand. The recovery in risk sentiment undermines the haven demand for the USD, lifting the pair. Dovish Fed expectations also weigh negatively on the Greenback. Markets await tariff headlines.
GBP/USD recovers toward 1.2800 on improving risk mood
GBP/USD holds its ground and edges higher toward 1.2800 in the second half of the day on Tuesday. The pair draws support from renewed US Dollar weakness and a positive shift in risk sentiment but US President Trump's tariff war and global growth concerns could limit its upside.
Gold bounces back above $3,000 as trade war tensions flair up
Gold price is bouncing higher in tandem with equities after another stellar nosedive move on Monday. The precious metal trades above the $3,000 to start the American session. The bounce is supported by a technical element on the one hand and a geopolitical driver on the other.
XRP battles tariff turbulence amid MVRV buy signal
Ripple seeks stability in a volatile crypto landscape influenced by macroeconomic factors, including reciprocal tariffs. The international money transfer token hit a low of $1.64 on Monday after opening the week at $1.92, representing a 14.5% daily drop.
Strategic implications of “Liberation Day”
Liberation Day in the United States came with extremely protectionist and inward-looking tariff policy aimed at just about all U.S. trading partners. In this report, we outline some of the more strategic implications of Liberation Day and developments we will be paying close attention to going forward.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.