EURUSD Forecast and News
EUR/USD battles with 1.1700 as the market mood turns sour
Poor German data and renewed concerns about a default of the Chinese Evergrande property giant undermined investors’ sentiment, pushing them into the dollar’s safety.
Latest EUR News
Technical Overview
From a technical perspective, traders are likely to wait for a convincing break through the weekly trading range before placing fresh directional bets. A sustained move beyond the 1.1750-55 region might prompt some short-covering move and lift the pair to the 1.1800 mark. This is followed by resistance near the 1.1820-25 horizontal zone, above which the momentum could get extended and allow bulls to aim to conquer the 1.1900 round figure.
On the flip side, immediate support is pegged near the 1.1725-20 region ahead of the 1.1700 mark and monthly lows, around the 1.1685 region. Some follow-through selling below YTD lows, around the 1.1665 region will be seen as a fresh trigger for bearish traders and turn the pair vulnerable. The downward trajectory could then drag the pair further towards the 1.1600 round-figure mark.
Fundamental Overview
The EUR/USD pair struggled to capitalize on the previous day's solid rebound from one-month lows and witnessed a subdued/range-bound price action through the early European session on Friday. The emergence of fresh buying around the US dollar was seen as a key factor that acted as a headwind for the major. Uncertainty about potential risks from the debt crisis at China Evergrande Group kept a lid on the recent optimism. This, along with prospects for an early rate hike by the Fed, dampened investors' appetite for riskier assets and helped revive demand for the safe-haven greenback.
Meanwhile, the Fed on Wednesday indicated that it will likely begin rolling back the massive pandemic-era stimulus toward the end of this year and complete the process by mid-2020. Adding to this, the so-called dot plot revealed a growing inclination among policymakers to raise interest rates in 2022. The repricing of the likely timing of the monetary policy tightening by the Fed pushed the US Treasury bond yields higher. In fact, the yield on the benchmark 10-year government bond back above the 1.4% threshold for the first time since July on Thursday and further underpinned the USD.
The pair witnessed a modest pullback from the vicinity of weekly tops, around 1.1750-55 region, though the downside is more likely to remain cushioned. Investors might refrain from placing aggressive bets ahead of the German federal elections on Sunday. Hence, it will be prudent to wait for some follow-through selling before traders start positioning for the resumption of the recent decline from monthly tops, or levels just above the 1.1900 mark. Heading into the key event risk, traders might take cues from the Fed Chair Jerome Powell's scheduled speech later during the early North American session.
SPECIAL WEEKLY FORECAST
Interested in weekly EURUSD forecast? Our experts make weekly updates forecasting the next possible moves of the euro-dollar pair. Here you can find the most recent forecast by our market experts:
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Big Picture
EUR/USD Bullish Themes
EUR/USD Bearish Themes
Latest EUR Analysis
Editors' picks
EUR/USD battles with 1.1700 as the market mood turns sour
Poor German data and renewed concerns about a default of the Chinese Evergrande property giant undermined investors’ sentiment, pushing them into the dollar’s safety.
GBP/USD accelerates its slump, trades around 1.3650
GBP/USD is under strong selling pressure, trimming most of its post-BOE gains. Concerns about the global financial health and slow moves towards tapering weigh on markets.
USD/JPY eases from multi-week tops, up little around 110.35-40 region
USD/JPY gained traction for the third successive day amid a modest USD strength. A softer risk tone benefitted the safe-haven JPY and kept a lid on any further gains.
XAU/USD hangs near multi-week lows, around $1,745 ahead of Powell
Gold struggled to capitalize on its attempted intraday recovery move. Hawkish Fed/BoE, rising bond yields acted as a headwind for the metal. Resurgent USD demand exerted additional pressure on the commodity.
WTI reaches monthly high near $73.55 on supply concerns
Crude oil continues to march higher and remains on track to jump around 2% weekly basis .The prices confides in a narrow trade range after posting strong gains in the overnight session. At the time of writing, WTI is trading at $73.36, up 0.29% for the day.
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EURUSD Yearly forecast
How could EURUSD move this year? Our experts make a EUR/USD update forecasting the possible moves of the euro-dollar pair during the whole year. Don't miss our 2021 EURUSD forecast!
EURUSD FORECAST 2021
In the EURUSD Forecast Price 2021, our dedicated contributors expect the bearish trend to slow down during the year. By the end of the year 2020, the average outlook for the pair was 1,2234. Read more details about the forecast.
From Jan 2020 to Dec 2020, the maximum level for the EURUSD (Euro US Dollar) was 1.2282 (on 17/12/20), and the minimum, 1.0645 (on 19/03/20).
MOST INFLUENTIAL POLITICAL EVENTS IN 2021 FOR EURUSD
A pandemic disrupted financial markets and the global economy in 2020, and the greenback is the overall loser. The US management of the pandemic resulted in 18 million people infected and roughly 325,000 deaths. It also cost Trump's government, who lost the re-election to Democrat rival Joe Biden. Social distancing, face-masks and remote working are part of a new normal that will likely continue through 2021. Central banks' measures will be key for EUR/USD moves this next year.
Influential Institutions & People for the EUR/USD
The Euro US Dollar can be seriously affected by news or the decisions taken by two main central banks:
The European Central Bank (ECB)
The European Central Bank (ECB) is the central bank empowered to manage monetary policy for the Eurozone and maintain price stability, so that the euro’s purchasing power is not eroded by inflation. The ECB aims to ensure that the year-on-year increase in consumer prices is less than, but close to 2% over the medium term. Another of its tasks is one of controlling the money supply. The European Central Bank’s work is organized via the following decision-making bodies: the Executive Board, the Governing Council and the General Council. Christine Lagarde is the President of this organism.
ECB Official Website, on Twitter and YouTube
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
Christine Lagarde
Christine Lagarde was born in 1956 in Paris, France. Graduated from Paris West University Nanterre La Défense and became President of the European Central Bank in November 1st 2019. Prior to that, she served as Chairman and Managing Director of the International Monetary Fund between 2011 and 2019. Lagarde previously held various senior ministerial posts in the Government of France: she was Minister of the Economy, Finance and Industry (2007–2011), Minister of Agriculture and Fishing (2007) and Minister of Commerce (2005–2007).
Lagarde on ECB'S Profile and Wikipedia
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. His term as a member of the Board of Governors will expire January 31, 2028. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
ECB NEWS & ANALYSIS
FED NEWS & ANALYSIS
About EURUSD
The EURUSD (or Euro Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs in the world. This group also includes the following currency pairs: GBP/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The popularity is due to the fact that it gathers two main economies: the European and American (from United States of America) ones. This is a widely traded currency pair where the Euro is the base currency and the US Dollar is the counter currency. Since the EURUSD pair consists of more than half of all the trading volume worldwide in the Forex Market, it is almost impossible for a gap to appear, let alone a consequent breakaway gap in the opposite direction.
Normally, it is very quiet during the Asian session because economic data that affects the fundamentals of those currencies is released in either the European or U.S. session. Once traders in Europe get to their desks a flurry of activity hits the tape as they start filling customer orders and jockey for positions. At noon activity slows down as traders step out for lunch and then picks back up again as the U.S. comes online. If there is important U.S. data we can expect quiet markets just ahead of the number. U.S. economic news have the ability to either reinforce an existing trend or reverse it depending on by how much it missed or beat expectations with the EURUSD news. By 5:00 GMT liquidity leaves the market once again as European traders close out positions and head home.
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', a way to mention the most important pairs worldwide. This group also includes the following currency pairs: EUR/USD, USD/JPY, AUD/USD, USD/CHF, NZD/USD and USD/CAD. The pair is also called 'The Cable', reffering to the first Transatlantic cable that was crossing the Atlantic Ocean in order to connect Great Britain with the United States of America. This term was originated in the mid-19th century and it makes GBP/USD one of the oldest currency pairs in the world.
The popularity of the Pound Dollar is due to the fact that represents two strong economies: British and American (from United States of America). The Cable is a widely observed and traded currency pair where the Pound is the base currency and the US Dollar is the counter currency. After the result of the Brexit referendum, where the majority of the British voted to abandon the European Union, GBP/USD has been suffering some turbulence in the Forex market as a consequence of the associated risks of leaving the single market.
USD/JPY
The USD/JPY (or US Dollar Japanese Yen) currency pair is one of the 'Majors', the most important pairs in the world. Japanese Yen has a low interest rate, normally used in carry trades, that's why is one of the most trades currencies worldwide. In the USD/JPY the US Dollar is the base currency and the Japanese Yen is the counter currency. The pair represents American (from United States of America) and Japanese economies.
Trading the USD/JPY currency pair is also known as trading the "ninja" or the "gopher", although this last name is more frequently used when reffered to the GBP/JPY currency pair. The US Dollar Japanese Yen usually has a positive correlation with the following two pairs: USD/CHF and USD/CAD. The nature of this correlation is dued to the fact that both currency pairs also use the US Dollar as the base currency, such as USD/JPY. The value of the pair tends to be affected when the two main central banks of each country, the Bank of Japan (BoJ) and the Federal Reserve Bank (Fed), face serious interest rate differential.