EUR/USD Forecast: Sellers regain control on risk-aversion
- EUR/USD trades near 1.1550 in the European morning on Thursday.
- Markets remain risk-averse as the conflict in the Middle East widens.
- The technical outlook highlights a bearish bias in the near term.
EUR/USD stays under modest bearish pressure after posting losses on Wednesday and trades in negative territory at around 1.1550 in the European morning on Thursday. In the absence of high-tier data releases, the risk-averse market atmosphere could make it difficult for the pair to stage a rebound in the near term.
Euro Price Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the weakest against the Japanese Yen.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.18% | 0.20% | -0.10% | -0.05% | 0.24% | 0.15% | 0.24% | |
| EUR | -0.18% | 0.02% | -0.26% | -0.22% | 0.06% | -0.02% | 0.05% | |
| GBP | -0.20% | -0.02% | -0.28% | -0.25% | 0.04% | -0.04% | 0.03% | |
| JPY | 0.10% | 0.26% | 0.28% | 0.02% | 0.32% | 0.22% | 0.29% | |
| CAD | 0.05% | 0.22% | 0.25% | -0.02% | 0.29% | 0.21% | 0.26% | |
| AUD | -0.24% | -0.06% | -0.04% | -0.32% | -0.29% | -0.08% | -0.01% | |
| NZD | -0.15% | 0.02% | 0.04% | -0.22% | -0.21% | 0.08% | 0.05% | |
| CHF | -0.24% | -0.05% | -0.03% | -0.29% | -0.26% | 0.00% | -0.05% |
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).
Although investors cheered the International Energy Agency's (IEA) decision to make 400 million barrels of oil from their emergency reserves available to the market on Wednesday, news pointing to a further escalation of the Middle East crisis weighed heavily on market mood.
Iraq reportedly shut down oil port operations after Iran attacked two foreign oil tankers, while Bahrain, Kuwait, the United Arab Emirates and Saudi Arabia intercepted Iranian missiles and drones. In turn, crude Oil prices started rising again and the US Dollar (USD) benefited from safe-haven flows, causing EUR/USD to push lower.
Weekly Initial Jobless Claims will be the only data featured in the US economic calendar on Thursday. Investors are likely to ignore this report and remain focused on geopolitics. At the time of press, US stock index futures were down about 0.7% on the day. A bearish opening in Wall Street, followed by a selloff, could continue to boost the USD and drag EUR/USD lower in the second half of the day.
EUR/USD Technical Analysis:
In the 4-hour chart, EUR/USD trades at 1.1549. The near-term bias stays mildly bearish as the pair holds below the 20- and 50-period Simple Moving Averages (SMAs), while the 100- and 200-period SMAs around 1.17–1.18 cap the broader trend from above. Price is drifting near the lower area of the recent Bollinger Band structure, reflecting subdued volatility and persistent downside pressure rather than capitulation selling. The Relative Strength Index (RSI) oscillates in the low-40s, consistent with a weak bearish tone without oversold conditions, which leaves room for further downside probes.
Immediate support appears at 1.1531, the nearest horizontal level beneath spot, with a break opening the way toward 1.1500 and then 1.1460. On the upside, initial resistance stands at the 20-period SMA near 1.1590, followed by the 50-period SMA around 1.1620, where the upper Bollinger Band zone would further challenge a recovery. A sustained move above these clustered moving averages would be needed to ease bearish pressure and allow a retest of the 1.1670 horizontal resistance.
(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.
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