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EUR/USD Forecast: Euro needs to reclaim 1.0900 to turn bullish

  • EUR/USD trades in a narrow channel below 1.0900 to start the week.
  • The pair could struggle to gather bullish momentum unless risk mood improves.
  • ECB President Lagarde will be delivering a speech later in the day.

EUR/USD started the new week under modest bearish pressure and was last seen moving up and down in a narrow band below 1.0900. 

Escalating geopolitical tensions cause investors to move away from risk-sensitive assets and help the US Dollar (USD) turn resilient against its rivals early Monday. Growing fears over the Israel-Hamas conflict spreading in the Middle East following Yemen's Houthi rebels' attack on two Israeli ships in the Red Sea force markets to stay cautious.

Euro price today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the US Dollar.

 USDEURGBPCADAUDJPYNZDCHF
USD 0.16%0.31%0.38%0.66%0.40%0.60%0.72%
EUR-0.17% 0.17%0.22%0.51%0.23%0.43%0.57%
GBP-0.34%-0.16% 0.06%0.35%0.08%0.29%0.40%
CAD-0.39%-0.23%-0.07% 0.28%0.00%0.23%0.34%
AUD-0.66%-0.51%-0.34%-0.28% -0.28%-0.04%0.06%
JPY-0.47%-0.26%0.09%-0.01%0.29% 0.19%0.27%
NZD-0.62%-0.46%-0.29%-0.23%0.05%-0.20% 0.07%
CHF-0.73%-0.55%-0.39%-0.33%-0.04%-0.31%-0.10% 

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 Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

In the second half of the day, European Central Bank (ECB) President Christine Lagarde will be delivering a speech and attending a Q&A session in Paris.  

ECB policymakers have been pushing back against market expectation of rate cuts as early as the second quarter of 2024. In case Lagarde adopts a hawkish tone, the Euro could start gathering strength. 

The US economic docket will feature Factory Orders data for October, which is unlikely to trigger a noticeable market reaction. 

Meanwhile, investors will remain focused on developments surrounding the Middle East conflict. If safe-haven flows dominate the action in the American session, EUR/USD could have a hard time gaining traction.

EUR/USD Technical Analysis

EUR/USD faces stiff resistance in the 1.0890-1.0900 area, where the 100-period Simple Moving Average (SMA) on the 4-hour chart and the Fibonacci 23.6% retracement of the latest uptrend align. In case the pair rises above that level and starts using it as support, technical buyers could show interest and open the door for an extended recovery toward 1.0930 (50-period SMA) and 1.1000 (psychological level, static level).

On the downside, 1.0800 (Fibonacci 38.2% retracement) and 1.0750 (200-period SMA) could act as support if EUR/USD fails to reclaim 1.890-10900.

Author

Eren Sengezer

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.

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