EUR/USD Forecast: Euro lacks direction following volatile action
- EUR/USD recovers to the 1.1800 area on Wednesday.
- The technical outlook highlights a lack of clear directional bias.
- Investors will focus on comments from central bankers in the absence of high-impact data releeases.
After fluctuating in a relatively wide range at the beginning of the week, EUR/USD edged lower on Tuesday but managed to find support. The pair was last seen trading moderatly higher on the day, at around 1.1800.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.13% | -0.15% | 0.38% | -0.08% | -0.53% | -0.13% | 0.02% | |
| EUR | 0.13% | -0.01% | 0.50% | 0.06% | -0.40% | 0.00% | 0.15% | |
| GBP | 0.15% | 0.01% | 0.55% | 0.06% | -0.39% | 0.01% | 0.17% | |
| JPY | -0.38% | -0.50% | -0.55% | -0.44% | -0.89% | -0.50% | -0.34% | |
| CAD | 0.08% | -0.06% | -0.06% | 0.44% | -0.45% | -0.06% | 0.10% | |
| AUD | 0.53% | 0.40% | 0.39% | 0.89% | 0.45% | 0.40% | 0.58% | |
| NZD | 0.13% | -0.00% | -0.01% | 0.50% | 0.06% | -0.40% | 0.15% | |
| CHF | -0.02% | -0.15% | -0.17% | 0.34% | -0.10% | -0.58% | -0.15% |
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 positive shift seen in risk mood made it difficult for the US Dollar (USD) to preserve its strength and helped EUR/USD hold its ground. Wall Street's main indexes recovered decisively on Tuesday after suffering large losses on Monday, as the negative impact of the uncertainty surrounding the US trade policy faded away.
In his State of the Union speech, US President Donald Trump said that there is no inflation and there is "tremendous growth," pointing to tariffs as one of the main reasons behind the economic turnaround. Trump further added that almost all trading partners want to keep the trade deals they already made despite the Supreme Court's ruling.
Early Wednesday, US stock index futures rise about 0.2%. Anoter day of bullish action in Wall Street could allow EUR/USD to stretch higher in the near term.
The economic calendar will not feature any high-impact data releases. In the second half of the day, several Federal Reserve (Fed) policymakers will be delivering speeches. The CME FedWatch Tool shows virtually no chance of a Fed rate cut in March and points to about an 85% probability of one more policy hold in April. The market positioning suggests that the USD doesn't have a lot of room left on the upside even if Fed policymakers reiterate a cautious approach to policy-easing. Conversely, dovish hints could weigh on the USD.
EUR/USD Technical Analysis:
In the 4-hour chart, EUR/USD trades at 1.1791. The near-term bias is mildly bearish as the pair holds below the downward-sloping 50- and 100-period Simple Moving Averages (SMAs) while clinging to the 200-period SMA around 1.1792. Price action remains capped beneath the descending resistance trend line from 1.2023, which continues to limit recovery attempts after the recent bounce failed near the 1.1810 area. The Relative Strength Index (RSI) hovers just below the 50 mark, indicating weak upside momentum and aligning with a downside-tilted consolidation rather than a clear reversal higher.
Immediate resistance emerges at the 50.0% Fibonacci retracement of the 1.1590–1.2027 advance at 1.1809, followed by the 38.2% retracement at 1.1860, where the cluster of declining SMAs and the descending trend line reinforce a heavier supply zone. On the downside, the 61.8% retracement at 1.1757 forms initial support just beneath current levels, with a sustained break exposing the 1.1684 area at the 78.6% retracement. As long as the pair trades below 1.1809, rallies are vulnerable to selling pressure, and a close under 1.1757 would strengthen the bearish tone.
(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.
