- EUR/USD trades in positive territory at around 1.0400 on Friday.
- The technical outlook suggests that the bearish bias remains intact.
- Investors await November PCE inflation data from the US.
EUR/USD found support following Wednesday's sharp decline and closed marginally higher on Thursday. The pair gathers recovery momentum and trades at around 1.0400 in the European morning on Friday.
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 US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.02% | 0.84% | 2.12% | 1.03% | 1.85% | 2.12% | 0.18% | |
| EUR | -1.02% | -0.13% | 1.19% | 0.08% | 0.99% | 1.18% | -0.77% | |
| GBP | -0.84% | 0.13% | 1.20% | 0.20% | 1.12% | 1.28% | -0.65% | |
| JPY | -2.12% | -1.19% | -1.20% | -1.08% | -0.27% | 0.02% | -1.82% | |
| CAD | -1.03% | -0.08% | -0.20% | 1.08% | 0.86% | 1.08% | -0.85% | |
| AUD | -1.85% | -0.99% | -1.12% | 0.27% | -0.86% | 0.19% | -1.75% | |
| NZD | -2.12% | -1.18% | -1.28% | -0.02% | -1.08% | -0.19% | -1.93% | |
| CHF | -0.18% | 0.77% | 0.65% | 1.82% | 0.85% | 1.75% | 1.93% |
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 US Dollar (USD) preserved its strength on Thursday after outperforming its rivals on the Federal Reserve's (Fed) hawkish dot plot on Wednesday. Upbeat macroeconomic data releases from the US further supported the currency. EUR/USD, however, managed to hold its ground.
The decisive upsurge seen in EUR/GBP cross on Wednesday showed that the Euro captured capital outflows out of Pound Sterling (GBP). The Bank of England (BoE) announced on Thursday that it maintained the bank rate at 4.75% after the December meeting. Three members of the Monetary Policy Committee (MPC), however, unexpectedly voted in favor of a rate cut, triggering a GBP selloff.
Later in the day, the US Bureau of Economic Analysis will publish the Personal Consumption Expenditures (PCE) Price Index data for November. Following the Fed meeting, investors are unlikely to react to the PCE inflation data.
Market participants will also keep a close eye on political developments in the US. There is a possibility of a government shutdown at the end of the day unless Congress approves a new spending bill. In case US T-bond yields turn south in the American session, the USD could have a hard time finding demand.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart stays well below 50 despite the latest rebound, suggesting that EUR/USD is still in a correction phase rather than turning bullish. On the downside, static support is located at 1.0350 ahead of 1.0300 (round level, static level) and 1.0240 (static level).
In case the pair stabilizes above 1.0400 (static level, round level) next resistances could be spotted at 1.0440 (static level) and 1.0500 (static level, 50-period Simple Moving Average).
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
EUR/USD remains offered in the low-1.0900s
The generalised selling pressure continues to weigh on the risk complex, pushing EUR/USD back toward the 1.0900 support level amid a growing risk-off mood, as traders assess President Trump’s reciprocal tariffs and their impact on economic activity.
GBP/USD retreats further and breaks below 1.2800
The US Dollar is picking up extra pace and flirting with daily highs, sending GBP/USD to multi-week lows near 1.2770 in a context where safe-haven demand continues to dictate sentiment amid the chaos of US tariffs.
Gold slips back below the $3,000 mark
Gold has turned lower, slipping beneath the key $3,000 mark per troy ounce amid a broad sell-off across global equity markets. The decline in the precious metal may reflect investors unwinding long positions in gold to offset mounting losses in stocks.
US stock market suddenly reverses higher after rumor of 90-day tariff pause before sinking again Premium
NASDAQ sinks 4% before shooting higher on tariff pause rumor. CNBC says White House unaware of tariff pause rumor. S&P 500 sinks to January 2024 level. Bank of America cuts its year-end target for S&P 500 by 16%.
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.