- EUR/USD extends its sideways grind above 1.0400 in the early American session on Thursday.
- The mixed action seen in Wall Street helps the US Dollar stay resilient against its rivals.
- Preliminary January Manufacturing and Services PMI data on Friday could help the pair find direction.
EUR/USD continues to move up and down in a narrow channel above 1.0400 in the American session on Thursday. The pair's technical outlook suggests that the bullish bias remains intact, while lacking momentum.
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 | -1.31% | -1.25% | 0.06% | -0.61% | -1.29% | -1.31% | -0.55% | |
| EUR | 1.31% | -0.01% | 1.29% | 0.60% | 0.07% | -0.11% | 0.64% | |
| GBP | 1.25% | 0.01% | 1.21% | 0.60% | 0.10% | -0.11% | 0.65% | |
| JPY | -0.06% | -1.29% | -1.21% | -0.68% | -1.30% | -1.46% | -0.79% | |
| CAD | 0.61% | -0.60% | -0.60% | 0.68% | -0.61% | -0.70% | 0.05% | |
| AUD | 1.29% | -0.07% | -0.10% | 1.30% | 0.61% | -0.28% | 0.48% | |
| NZD | 1.31% | 0.11% | 0.11% | 1.46% | 0.70% | 0.28% | 0.57% | |
| CHF | 0.55% | -0.64% | -0.65% | 0.79% | -0.05% | -0.48% | -0.57% |
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 data from the US showed on Thursday that the weekly Initial Jobless Claims rose to 223,000 in the week ending January 18 from 217,000 in the previous week. This reading came in above the market expectation of 220,000 and limited the US Dollar's gains, in turn helping EUR/USD find support.
Meanwhile, Wall Street's main indexes trade mixed following the opening bell, reflecting a cautious market stance ahead of US President Donald Trump's speech at the World Economic Forum in Davos. At the time of press, the Dow Jones Industrial Average was up 0.2%, while the Nasdaq Composite was down 0.5%.
In case safe-haven flows dominate the action following Trump's remarks, EUR/USD could have a hard time regaining its traction.
On Friday, S&P Global will publish the preliminary January Manufacturing and Services Purchasing Managers Index (PMI) data for Germany, the Eurozone and the US.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) moves sideways above 50, suggesting that the bullish bias remains unchanged but it's struggling to gather momentum. EUR/USD faces key support level at 1.0390, where the 200-period Simple Moving Average (SMA) meets the Fibonacci 50% retracement of the latest downtrend. A daily close below this level could attract technical sellers and open the door for an extended decline toward 1.0350 (Fibonacci 38.2% retracement) and 1.0320 (100-period SMA).
On the upside, first resistance could be spotted at 1.0440 (Fibonacci 61.8% retracement, 50-day SMA) ahead of 1.0500 (round level, 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.
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 remains depressed below 0.6300 as trade jitters underpin USD
AUD/USD trades with a negative bias below the 0.6300 mark amid a mildly stronger USD, which hit a three-week top during the Asian session. Moreover, worries over Trump's trade tariffs weigh on investors' sentiment and further undermine the risk-sensitive Aussie amid bets that the RBA will cut interest rates again in May.
USD/JPY flat-lined around mid-150.00s; remains close to multi-week high set on Tuesday
USD/JPY struggles to build on the overnight move higher and oscillates around mid-150.00s during the Asian session on Thursday amid mixed cues. Hawkish BoJ expectations and the risk-off impulse, led by Trump's new tariff on imported cars, underpin the safe-haven JPY, capping spot prices.
Gold price sticks to positive bias above $3,000 on safe-haven demand
Gold price ticks higher during the Asian session on Thursday as worries about Trump's tariff plans continue to benefit the safe-haven bullion. However, a modest USD uptick to a three-week high caps the commodity. Traders also seem reluctant and opt to wait for the release of the US PCE Price Index on Friday.
Stablecoin mania kicks off as Wyoming and Fidelity join the race
According to Governor Mark Gordon, the state of Wyoming has joined the race for a stablecoin, following plans to launch WYST, a US Dollar-backed token in July.
Sticky UK services inflation shows signs of tax hike impact
There are tentative signs that the forthcoming rise in employer National Insurance is having an impact on service sector inflation, which came in a tad higher than expected in February. It should still fall back in the second quarter, though, keeping the Bank of England on track for three further rate cuts this year.
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.