EUR/USD Forecast: Sellers retain control despite modest recovery attempt
- EUR/USD trades below 1.1450 in the European session on Monday.
- The technical outlook suggests that the bearish bias stays intact.
- The Fed and the ECB will conduct monetary policy meetings later in the week.
EUR/USD holds steady above 1.1400 early Monday after losing more than 1.5% in the previous week. An improving risk mood could help the pair edge higher but the technical outlook suggests that the bearish bias stays intact in the near term.
Euro Price Last 7 Days
The table below shows the percentage change of Euro (EUR) against listed major currencies last 7 days. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.93% | 0.69% | 0.78% | 0.74% | -0.43% | 0.96% | 1.34% | |
| EUR | -0.93% | -0.25% | -0.16% | -0.22% | -1.37% | -0.01% | 0.38% | |
| GBP | -0.69% | 0.25% | 0.13% | 0.04% | -1.12% | 0.25% | 0.63% | |
| JPY | -0.78% | 0.16% | -0.13% | -0.02% | -1.18% | 0.19% | 0.57% | |
| CAD | -0.74% | 0.22% | -0.04% | 0.02% | -1.17% | 0.21% | 0.60% | |
| AUD | 0.43% | 1.37% | 1.12% | 1.18% | 1.17% | 1.39% | 1.77% | |
| NZD | -0.96% | 0.01% | -0.25% | -0.19% | -0.21% | -1.39% | 0.37% | |
| CHF | -1.34% | -0.38% | -0.63% | -0.57% | -0.60% | -1.77% | -0.37% |
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).
Crude Oil prices continue to push higher to start the week but the upside remains capped for now, as investors assess the latest headlines surrounding the Middle East conflict.
Over the weekend, the US military hit targets located on Kharg Island, a strategic Iranian outpost in the Persian Gulf, and warned it could hit Oil infrastructure next if Tehran keeps disrupting naval activity in the Strait of Hormuz. Trump also called on allies to help secure the Strait of Hormuz.
European Union (EU) foreign ministers are reportedly debating how they could provide support in trying to secure the Strait of Hormuz, and the UK plans to send minesweeping drones. Japanese Prime Minister (PM) Sanae Takaichi said on Monday that they are exploring ways to protect Japanese vessels in the Middle East, but said they don't currently have any plans to dispatch the navy to the region.
The US economic calendar will feature mid-tier data releases on Monday, which are likely to be ignored by investors. Later in the week, the Federal Reserve (Fed) and the European Central Bank (ECB) will conduct policy meetings.
In the meantime, US stock index futures rise between 0.4% and 0.6% in the early European session. In case risk flows start to dominate the action in financial markets following a bullish opening in Wall Street, the US Dollar (USD) could lose some strength and allow EUR/USD to inch higher.
EUR/USD Technical Analysis:
The near-term bias is bearish, as the pair holds well below the 20- and 50-period Moving Averages (MAs) clustered in the mid-1.15s on the 4-hour chart, while the longer-term 100- and 200-period MAs descend from the 1.17s and 1.18s, reinforcing a downside trend structure. Price trades near the lower Bollinger Band after an extended slide from the upper band region, underscoring persistent selling pressure. The Relative Strength Index (RSI) hovers in the low 30s after printing sub-30 readings, signaling oversold conditions but not yet a decisive momentum reversal.
Immediate resistance is seen at 1.1500, where prior horizontal resistance converges with the falling 20-period MA, and a break above this area would open the way toward 1.1670, aligning with the descending 100-period MA and a key structural cap. On the downside, initial support emerges near 1.1400, defined by a drawn horizontal level just beneath the market, with a clear break exposing 1.1330 and then 1.1300 as the next bearish targets. As long as EUR/USD holds below 1.1500, rallies remain vulnerable to selling into this resistance band.
(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.
