EUR/USD Forecast: Two steps down, one step up seems to be the pattern


  • The EUR/USD is dropping once again after a positive day on Thursday.
  • Multiple worries weigh on the common currency against the USD which enjoys safe haven flows.
  • The technical picture remains mostly bearish as the week draws to a close.

The EUR/USD is trading around 1.1700 after falling to 1.1684, close to the 2018 low of 1.1676. The primary driver remains the risk-off sentiment which boosts the Yen and also the US Dollar. 

US President Donald Trump canceled the Summit with North Korean Leader Kim Jong-un, sending stock markets lower. The worries about peace in the Korean peninsula join trade frictions. Trump is dissatisfied with the understanding with China regarding a "trade truce." The US also considers imposing tariffs on imported cars and the EU is frustrated with the secondary sanctions on Iran which hit European companies. 

Also, there are concerns about politics in the euro-zone. The identity of Italy's Finance Minister is still unknown, but it may well be Euroskeptic Paolo Savona. Spain joins Italy in political uncertainty after a court ruled against politicians in the ruling PP party and the opposition is considering a vote of no confidence that could bring down the government. 

A point of light came from Germany's IFO institute. The Business Climate came out at 102.2 points in May, 0.1 above the number in April and above expectations. The publication helped the Euro stabilize, but the road to recapturing 1.1750 is long. 

Later today, the US publishes its Durable Goods Orders figures for April. The figure feeds into GDP and is eyed by the Fed.

See how to trade the event with EUR/USD.

The upcoming weekend is a long one in the US, due to the Memorial Day holiday. This may imply choppier trading than usual. 

EUR/USD Technical Analysis

The EUR/USD is losing some of its downward Momentum but also moving a bit out of oversold territory. In general, the trend remains undoubtedly to the downside, and the pair is well below the 50 and 200-day Simple Moving Averages. 

The 1.1676 is the immediate line of support, followed by 1.1630, which was a battleground level in November. Serious support is at 1.1550, the trough around those days.

To the upside, 1.1720 was the low point in December and also an initial trough in May. Further up, 1.1750 capped the pair on May 24th, and 1.1822 was a stepping stone on the way down in early May. 

EUR USD technical analysis May 28 June 1 2018

More: EUR/USD ceiling is lower than it seems, easier to fall — Confluence Detector

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.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

GBP/USD jumps om Brexit, Bailey retreats on lockdown

GBP/USD  soared above 1.2850 after BOE’s Governor Bailey said mention to negative rates does not imply use. EU’s Barnier heading to London for informal trade talks. PM Johnson announces new restrictions, but no full lockdown

GBP/USD News

EUR/USD hits six-week lows below 1.1750 amid dollar demand

EUR/USD is trading at the weakest levels in six weeks below 1.1750 amid resurgent US dollar demand despite the upbeat market mood. Concerns over COVID-19 resurgence in Europe continue to weigh on the euro. 

EUR/USD News

Gold remains depressed near $1900 mark

Gold remained depressed for the second consecutive session on Tuesday. The downside remains limited ahead of the Fed Chair Powell’s testimony. The set-up still supports prospects for a slide back to August monthly lows.

Gold News

Crypto market shrinks while Bitcoin grows

Ethereum takes the brunt of the falls and gives market share to Bitcoin. Pause in the falls before looking for key supports at lower prices. Ripple plays dangerously and risks looking for support at the $0.20 level.

Read more

WTI: Trapped between key hourly averages ahead of API data

WTI (futures on NYMEX) consolidates the bounce above the $40 barrier, having regained the 21-hourly Simple Moving Averages (HMA), currently at $39.75.

Oil News

Forex Majors

Cryptocurrencies

Signatures