EUR/USD Forecast and News


EUR/USD retreats toward 1.0850 on modest USD recovery

EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.

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EUR/USD Technical Overview

The Relative Strength Index declined on Thursday but stabilized above 60, suggesting that the latest pullback was a technical correction rather than the beginning of a reversal. 1.0890-1.0900 (Fibonacci 78.6% retracement of the latest downtrend, upper limit of the ascending regression channel, psychological level) aligns as first resistance before 1.0940 (static level) and 1.0980 (March 8 high).

On the downside, strong support is located at 1.0830-1.0820 (100-day Simple Moving Average (SMA), mid-point of the channel) ahead of 1.0790-1.0800 (50-day SMA, 200-day SMA).


Fundamental Overview

Following Wednesday's upsurge, EUR/USD struggled to preserve its bullish momentum and closed modestly lower on Thursday. The pair stays relatively calm slightly above 1.0850 in the early European session o Friday.

The US Dollar (USD) managed to stage a rebound on Thursday after the data published by the US Department of Labor showed that there were 222,000 weekly Initial Jobless Claims in the week ending May 11, down from 232,000 in the previous week. Additionally, cautious comments from Federal Reserve (Fed) officials with regards to policy easing helped the USD stay resilient against its major rivals.

Atlanta Fed President Raphael Bostic said that he was pleased with the inflation progress in April but noted that the Fed was not yet there to cut the policy rate. Cleveland Fed President Loretta Mester noted that the monetary policy was well-positioned as they look to review more data and Richmond Fed President Thomas Barking Told CNBC that the latest Consumer Price Index (CPI) data showed that inflation was not where the Fed was trying to get.

The US economic calendar will not feature any high-tier data releases on Friday. In the American session, Minneapolis Fed President Neel Kashkari, Fed Governor Christopher Waller and San Francisco Fed President Mary Daly will be delivering speeches. 

In case Fed officials stick to a cautious tone, the USD could hold its ground heading into the weekend and make it difficult for EUR/USD to extend its weekly uptrend.



SPECIAL WEEKLY FORECAST

Interested in weekly EUR/USD forecast? Our experts make weekly updates forecasting the next possible moves of the Euro-US Dollar pair. Here you can find the most recent forecast by our market experts:

EUR/USD: Could FOMC Minutes provide fresh clues? Premium

EUR/USD: Could FOMC Minutes provide fresh clues?

The EUR/USD pair advanced for a fourth consecutive week, comfortably trading around 1.0860 ahead of the close. Progress had been shallow, as the pair is up roughly 250 pips from the year low of 1.0600 posted mid-April. The Euro lacks self-strength as economic progress in the area has been relatively limited, partially due to tight monetary conditions. The pair’s rally is a good indication of the broad US Dollar’s (USD) weakness.

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Editors' picks

EUR/USD retreats toward 1.0850 on modest USD recovery

EUR/USD retreats toward 1.0850 on modest USD recovery

EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.

EUR/USD News

GBP/USD holds above 1.2650 following earlier decline

GBP/USD holds above 1.2650 following earlier decline

GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.

GBP/USD News

USD/JPY recovers to 156.00 as US Dollar bounces back

USD/JPY recovers to 156.00 as US Dollar bounces back

USD/JPY rebounds sharply to 156.00 amid a firm recovery in the US Dollar. Fed officials one good inflation data as incapable for unwinding the restrictive policy stance. Japan’s weak GDP deepens fears of BoJ’s limited scope for policy-tightening.

USD/JPY News

Gold climbs to multi-week highs above $2,400

Gold climbs to multi-week highs above $2,400

Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.

Gold News

WTI trades sideways around $79.00 with eyes on PBoC policy decision

WTI trades sideways around $79.00 with eyes on PBoC policy decision

WTI trades inside Thursday’s trading range ahead of PBoC’s interest rate decision. The oil demand outlook has improved as US inflation softens as expected in April. Fed policymakers see a one-time decline in inflation as insufficient to roll back restrictive policy stance.

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EUR/USD Yearly forecast

How could EUR/USD 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 2024 EUR/USD forecast!

EUR/USD FORECAST 2024

In the EURUSD 2024 Forecast, our analyst, Valeria Bednarik, anticipates gains for the next couple of months. The Eurozone economy would need to show steady signs of recovery to prevent EUR/USD from collapsing below 1.0390 in the year's second half. Read more details about the forecast.

The pair traded as low as 1.0447 and as high as 1.1275 throughout 2023, with currencies moving on sentiment.

MOST INFLUENTIAL POLITICAL EVENTS IN 2024 FOR EUR/USD

There is a note of color that would stand out in the upcoming months: the US 2024 presidential election that will take place on November 5. The contest nomination will start as soon as January and run until June. The pinch of drama comes from Donald Trump’s desire to represent Republicans once again. A potential second government of Donald Trump could mean higher inflationary pressures as Trump could reintroduce tariffs on imports and push against the agreements between China and the Biden administration.


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. 

The Federal Reserve Bank (Fed)

On the other hand we found The Federal Reserve System (Fed) wich is the central banking system of the United States. Fed has two main targets: to keep unemployment rate to their lowest possible levels and inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors, partially presidentially appointed Federal Open Market Committee (FOMC). The FOMC organizes 8 meetings in a year and reviews economic and financial conditions. Also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth.


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).

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.

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About EUR/USD

The EUR/USD (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 EUR/USD 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 EUR/USD 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.