EURUSD Forecast and News


EUR/USD stays under pressure below 1.0500

EUR/USD is having a difficult time staging a rebound after having dropped below 1.0500 earlier in the day. FOMC Chairman Powell's relatively optimistic comments on the economic outlook provided a boost to the dollar in the second half of the day, weighing on the pair. 

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Technical Overview

Euro/dollar has failed to break above the 4h-50 SMA, despite constant attempts. It is also capped by the 4h-100 SMA. Moreover, after benefiting from higher lows, the pair has now been setting lower lows and also lower highs. 

Support awaits at 1.05, a psychologically significant level, followed by 1.0485 and 1.0465, both serving as cushions of late. Further down, 1.0440 and 1.04 await. 

Resistance is at 1.0535 and 1.0555. 


Fundamental Overview

Spain is hot, Germany not – perhaps the flocking of northern tourists to the warm Mediterranean sees has pushed annual inflation in Spain to 10%. However, Europe's largest country has not experienced double-digit inflation. On the contrary – the Consumer Price Index came out at 7.6% in Germany, below 7.9% expected. 

Inflation figures have tended to surprise to the upside, but this fresh German figure from June is a surprise downside surprise and serves as the first reason to expect a weaker euro. European Central Bank President Christine Lagarde is set to take to the stage with her peers from the US and the UK, with less ammunition to support a rapid pace of rate hikes. 

The second reason to expect EUR/USD to fall is hot inflation in the US – and more precisely, expectations for future price rises, which are of high importance to the Federal Reserve. The Conference Board's Consumer Confidence release included an upgrade of inflation expectations from 7.5% to 8%. When everybody expects higher prices, it becomes a self-fulfilling prophecy.

Fed Chair Jerome Powell previously described an increase in consumers' expectations as "eye-catching." Will he repeat that again? In the panel discussion, Powell may refrain from commenting on the next decision in July, but any stark message against higher prices could send the dollar higher.



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:

EUR/USD: Economic tsunami catching policymakers off guard Premium

EUR/USD: Economic tsunami catching policymakers off guard

Fresh signs of economic slowdown exacerbate recession-related fears. Central bankers may be cautious or aggressive, but anyway can do little about energy and food prices. EUR/USD's long-term bearish stance remains intact, spikes will likely be seen as selling opportunities.

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Latest EUR Analysis


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Editors' picks

EUR/USD stays under pressure below 1.0500

EUR/USD stays under pressure below 1.0500

EUR/USD is having a difficult time staging a rebound after having dropped below 1.0500 earlier in the day. FOMC Chairman Powell's relatively optimistic comments on the economic outlook provided a boost to the dollar in the second half of the day, weighing on the pair. 

EUR/USD News

GBP/USD rebounds modestly, trades near mid-1.2100s

GBP/USD rebounds modestly, trades near mid-1.2100s

GBP/USD fell to its lowest level in nearly two weeks near 1.2100 but managed to stage a rebound. With the dollar preserving its strength on the back of FOMC Chairman Powell's hawkish comments, however, the pair stays in negative territory near 1.2150.

GBP/USD News

USD/JPY spikes to fresh 24-year top, bulls looking to build on momentum beyond 137.00 mark

USD/JPY spikes to fresh 24-year top, bulls looking to build on momentum beyond 137.00 mark

USD/JPY scaled higher for the fourth straight day and shot to a fresh 24-year peak on Wednesday. Fed Chair Jerome Powell’s hawkish remarks boosted the USD and remained supportive of the move. Retreating US bond yields might turn out to be the only factor capping the upside for spot prices.

USD/JPY News

Gold steadies near $1,820 following earlier drop

Gold steadies near $1,820 following earlier drop

Gold is struggling to make a decisive move in either direction and seems to have steadied near $1,820, where it closed on Tuesday. Despite the broad-based dollar strength, XAU/USD holds its ground amid a more-than-2% decline seen in the 10-year US yield.

Gold News

WTI bulls keep reins around $109.00 amid supply crunch woes

WTI bulls keep reins around $109.00 amid supply crunch woes

WTI bulls attack $109.00 during a three-day uptrend to the initial Asian session on Tuesday. The black gold’s latest advances could be linked to the headlines concerning fears of a supply crunch, mainly emanating from the US and due to the sanctions on Russia. Adding to the energy benchmark’s strength could be the chatters surrounding OPEC+ forecasts for 2022 market surplus.

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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 2022 EURUSD forecast!

EURUSD FORECAST 2022

In the EURUSD 2022 Forecast, our dedicated contributors expect the bearish trend to continue, almost during the Q1 and the Q2 of 2022. By the end of the year 2021, the average outlook for the pair was 1,1306. Read more details about the forecast.

From Jan 2021 to Dec 2021, the maximum level for the EURUSD (Euro US Dollar) was 1.2328 (on 06/01/21), and the minimum, 1.1200 (on 24/12/21).

MOST INFLUENTIAL POLITICAL EVENTS IN 2022 FOR EURUSD

Much water has run under the bridge in 2021. Central bankers from around the world have been cooling down speculation on persistently high inflation, calling in “temporarily,” and forecasting it would slowly stabilize to more suitable levels by 2022. But make no mistake: Hot inflation is the elephant in the room. Central banks' measures will be key for EUR/USD moves this next year. The coronavirus pandemic that hit the world in March 2020 still goes on and will also be a critical event in 2022, although there’s a better economic perspective.


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 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.