- EUR/USD came under renewed bearish pressure and dropped below 1.1100.
- German inflation data and US GDP revision will be featured in the economic calendar.
- The near-term technical outlook points to a buildup of bearish momentum.
EUR/USD lost more than 0.5% on Wednesday and continued to stretch lower early Thursday. At the time of press, the pair was trading at its lowest level in over a week below 1.1100.
Euro PRICE This week
The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.99% | 0.26% | 0.16% | -0.29% | -0.17% | -0.78% | -0.39% | |
| EUR | -0.99% | -0.77% | -0.80% | -1.26% | -1.23% | -1.74% | -1.34% | |
| GBP | -0.26% | 0.77% | -0.15% | -0.55% | -0.47% | -1.05% | -0.63% | |
| JPY | -0.16% | 0.80% | 0.15% | -0.44% | -0.25% | -0.73% | -0.45% | |
| CAD | 0.29% | 1.26% | 0.55% | 0.44% | 0.13% | -0.43% | -0.09% | |
| AUD | 0.17% | 1.23% | 0.47% | 0.25% | -0.13% | -0.52% | -0.12% | |
| NZD | 0.78% | 1.74% | 1.05% | 0.73% | 0.43% | 0.52% | 0.40% | |
| CHF | 0.39% | 1.34% | 0.63% | 0.45% | 0.09% | 0.12% | -0.40% |
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).
Soft regional inflation readings from Germany weigh on the Euro during the European trading hours. Monthly Consumer Price Index (CPI) in North Rhine Westphalia and Bavaria declined 0.1% in August, while it fell 0.2% in Brandenburg and Saxony. After seeing these figures, investors are unlikely to react to country-wide CPI data from Germany later in the session.
The US Bureau of Economic Analysis will release the second estimate of the annualized Gross Domestic Product (GDP) growth for the second quarter, which is expected to come in at 2.8% to match the first estimate. Unless there is a noticeable revision in either direction, market participants could ignore this data and react to the weekly Initial Jobless Claims reading.
Investors forecast the number of first-time application for unemployment benefits to hold steady at 232,000 in the week ending August 26. A significant decline in this data, with a print of 220,000 or lower, could provide an additional boost to the US Dollar (USD) in the early American session. On the other hand, an unexpected increase toward 250,000 could revive concerns over loosening conditions in the labor market and hurt the USD, helping EUR/USD stage a rebound.
EUR/USD Technical Analysis
EUR/USD broke below the lower limit of the ascending regression channel and the Relative Strength Index (RSI) indicator on the 4-hour chart fell below 40, reflecting a buildup of bearish momentum. The 100-period Simple Moving Average (SMA) and the Fibonacci 38.2% retracement of the latest uptrend form the first support at 1.1050 before 1.1000 (Fibonacci 50% retracement, psychological level) and 1.0960 (200-period SMA).
On the upside, 1.1100 (lower limit of the ascending channel, Fibonacci 23.6% retracement) aligns as first resistance. In case the pair returns within the ascending channel by stabilizing above this level, 1.1160 (static level) could be seen as next resistance before 1.1200 (psychological level, static level).
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
AUD/USD depreciates due to market caution ahead of US NFP
The Australian Dollar remains subdued against the US Dollar for the second consecutive day on Friday. The AUD/USD pair faces modest headwinds as the USD steadies ahead of the upcoming Nonfarm Payrolls report in the North American session.
USD/JPY: Japanese Yen stands firm near a multi-month high against a broadly weaker USD
The Japanese Yen continues to be underpinned by increasing bets for more BoJ rate hikes. Trade tariff jitters and the risk-off mood further seem to underpin demand for the safe-haven JPY. Expectations for further policy easing by the Fed weigh on the USD and the USD/JPY pair.
Gold price remains depressed ahead of US NFP; trade jitters to limit losses
Gold price trades with negative bias for the second straight day, though a combination of factors continues to act as a tailwind ahead of the crucial US NFP report later this Friday. Rising trade tensions continue to weigh on investors' sentiment.
Crypto AI Tokens: Why FET, NEAR and RNDR could outperform BTC after White House Summit
The White House Crypto Summit is scheduled to hold on Friday. Rather than double-down on BTC, sector-wide price trends show that investors are leaning towards Crypto AI altcoins.
Make Europe great again? Germany’s fiscal shift is redefining the European investment playbook
For years, Europe has been synonymous with slow growth, fiscal austerity, and an overreliance on monetary policy to keep its economic engine running. But a major shift is now underway. Germany, long the poster child of fiscal discipline, is cracking open the purse strings, and the ripple effects could be huge.
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.