EUR/USD Forecast: Euro shows no signs of life ahead of ECB Pres. Lagarde speech
- EUR/USD started the new week under modest bearish pressure.
- ECB President Lagarde will testify later in the day.
- The pair could hold its ground in case risk mood improves.
Following a quiet Asian session, EUR/USD started to edge lower and broke below 1.0650 in the European morning. The pair's technical outlook suggests that sellers retain control to begin the new week.
In an interview with CNBC early Monday, European Central Bank (ECB) Governing Council member Francois Villeroy de Galhau said that interest rates should remain at these levels for a sufficiently long period of time. He added that they are still expecting positive growth for 2024-2025.
In the meantime, the headline German IFO Business Climate Index inched lower to 85.7 in September from August's revised print of 85.8. Although this reading came in higher than the market expectation of 85.2, it failed to provide a boost to the Euro. "The German economy is treading water," IFO President Clemens Fuest said commenting on the data.
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.
| USD | EUR | GBP | CAD | AUD | JPY | NZD | CHF | |
| USD | 0.20% | 0.17% | 0.05% | 0.37% | 0.08% | 0.15% | 0.31% | |
| EUR | -0.20% | -0.03% | -0.14% | 0.19% | -0.13% | -0.05% | 0.11% | |
| GBP | -0.18% | 0.03% | -0.11% | 0.25% | -0.09% | -0.05% | 0.15% | |
| CAD | -0.06% | 0.13% | 0.11% | 0.33% | 0.02% | 0.09% | 0.26% | |
| AUD | -0.37% | -0.20% | -0.24% | -0.33% | -0.32% | -0.27% | -0.08% | |
| JPY | -0.08% | 0.14% | 0.11% | -0.02% | 0.33% | 0.09% | 0.24% | |
| NZD | -0.16% | 0.02% | 0.00% | -0.09% | 0.26% | -0.09% | 0.13% | |
| CHF | -0.33% | -0.12% | -0.14% | -0.26% | 0.08% | -0.25% | -0.16% |
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, ECB President Christine Lagarde will testify before the European Commission's Committee on Economic and Monetary Affairs. In case Lagarde opens the door to additional policy tightening the Euro could gather strength. Nevertheless, it would be surprising to see her change her tone and drift away from the policy statement she delivered following the September meeting.
The US economic docket will not feature any high-tier data releases on Monday. Hence, the risk perception could drive the US Dollar's valuation. At the time of press, US stock index futures were trading flat. In case Wall Street's main indexes open in positive territory, the USD could struggle to find demand.
EUR/USD Technical Analysis
EUR/USD was last seen trading at around 1.0630 (static level, mid-point of the descending regression channel). A four-hour close below that level could attract sellers and open the door for an extended decline toward 1.0600 (psychological level) and 1.0570 (lower limit of the descending channel). Meanwhile, the Relative Strength Index (RSI) indicator on the 4-hour chart stays near 40, suggesting that the pair has more room on the downside before turning technically oversold.
On the upside, 1.0660-1.0670 (50-period Simple Moving Average (SMA), upper limit of the descending channel) aligns as immediate resistance ahead of 1.0700 (psychological level, 100-period SMA) and 1.0750 (static level).
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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.
