EUR/USD News (Euro US Dollar)


EUR/USD drops below 1.11 amid upbeat US data, trade concerns

EUR/USD is struggling to hold onto 1.11 after robust US housing figures and solid consumer sentiment figures were published. Earlier, the common currency suffered from the concerns of new US tariffs on the EU.

Latest EURUSD News


Technical Overview

Euro/dollar has lost upside momentum on the four-hour chart. It has also dropped below the 100 Simple Moving Average and is struggling to hold onto the 50 and 200 SMAs. 

Nevertheless, the currency pair is still trading above uptrend support. A break below this line may open the door to further falls.

Support awaits at 1.1125, which is the daily low, followed by 1.1105, a swing low from earlier this week. It is followed by 1.1085, the 2020 trough, and then by 1.1065 and 1.1040.

Strong resistance awaits at 1.1145, which has separated ranges of late. Next, this week's highs of 1.1165 and 1.1175 are the next levels to watch. Further above, 1.1205, 1.1230, and 1.1240 are eyed.


Fundamental Overview

Calling Trump "obsessed" is probably not a winning strategy – at least not for the euro. The common currency is unable to benefit from the dollar's weakness.

Phil Hogan, the European Commissioner for Trade, told a conference in Washington that President Donald Trump is obsessed with America's trade deficit with the old continent. Moreover, he criticized the Sino-American trade deal that includes Chinese commitments to buying US goods – a potential violation of international commerce rules. Hogan is in the American capital to discuss Trump's threat to slap tariffs on French goods following France's "tech tax," which is imposed mostly on US companies.

These trade tensions have contributed to paring EUR/USD gains, triggered by several positive developments. The European Central Bank's meeting minutes were cautiously optimistic on Thursday. The bank sees indications that core inflation is rising and that the manufacturing slump is contained. 

Euro/dollar has also struggled to recover from upbeat US Retail Sales which beat expectations on all accounts – including an increase of 0.5% in the all-important Control Group. Yet while other currencies recovered against the greenback, the common currency stayed behind.

The University of Michigan publishes its preliminary read of Consumer Sentiment for January late on Friday. Economists expect ongoing optimism in consumption – the driver of the US economy. 

See US Michigan Consumer Sentiment Preview: No change is good

China reported annualized Gross Domestic Product growth of 6% in the fourth quarter, as expected. While this marks a slowdown, investors were encouraged by the yearly jump of 6.9% in industrial output in December and fro other indications of robust economic growth in the world's second-largest economy.

Alongside the trade deal with the US, the prospects for China and the rest of the world look promising. Stock markets are cheering and the safe-haven US dollar and Japanese yen have come under selling pressure. Yet as mentioned earlier, the euro is unable to benefit from the dollar's descent. 

Will the EUR/USD remain under pressure? Trade tensions and consumer data will likely move the pair.

One thing that is unlikely to move markets is Trump's impeachment trial. While the political drama may be of interest, the president will surely be acquited as Republican Senators are unlikely to vote against him.



Big Picture

THEMES AFFECTING THE EUR/USD

SPECIAL YEARLY FORECAST

EUR/USD Price Forecast 2020: Lean times soon to turn into flush times for euro dollar

Markets' lean season has lasted two full years and while those are not yet over, flush times are looking more and more likely for this 2020. EUR/USD news: The beginning of the end of the trade war? Ever since hitting 1.2537 in January 2018, the EUR/USD pair has been on a selling spiral that set a multi-year low of 1.0878 just two months ago. The level can hardly be considered an interim bottom when just considering the following price’s recovery, but the focus this time shouldn’t be put on technical readings, but in politics.

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Latest EURUSD Analysis


Latest EURUSD Analysis

Editors' picks

EUR/USD drops below 1.11 amid upbeat US data, trade concerns

EUR/USD is trading below 1.11 after robust US housing figures and solid consumer sentiment figures were published. Earlier, the common currency suffered from the concerns of new US tariffs on the EU.

EUR/USD News

GBP/USD down 100 pips after UK retail sales badly disappoint, amid USD strength

GBP/USD has plunged below 1.3050 after UK retail sales badly disappointed with a fall of 0.6% in December, on top of downward revisions. Odds of a BOE cut have risen.

GBP/USD News

Crypto market hyperspace mode On

The secondary actors of the crypto-sphere awaken and rally hard. Leading coins battle with greater resistance at the gates of a full bullish market. The only risk is an over-shoot, but that sentiment remains neutral.

Read more

Gold looks to close week flat below $1560

The XAU/USD pair climbed to a fresh daily high of $1560 in the early trading hours of the American session but struggled to preserve its momentum.

Gold News

USD/JPY: Losing bullish momentum but retaining gains

Chinese encouraging data kept markets in risk-on mode at the beginning of the day. The US January Michigan Consumer Sentiment Index is seen at 99.3, matching December figure. USD/JPY holding at the upper end of its weekly range could correct lower.

USD/JPY News

Majors

Cryptocurrencies

Signatures


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) 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. 

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.

ECB NEWS & ANALYSIS

FED NEWS & ANALYSIS


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.