EURUSD Forecast and News


EUR/USD settles below 0.9600 amid renewed dollar strength

The EUR/USD pair approaches its recent multi-year low of 0.9549 as fears took over markets during US trading hours. The escalating EU energy crisis adds pressure on the shared currency.

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Technical Overview

The EUR/USD pair is down for a sixth consecutive day, and it seems poised to extend its slump. The Momentum indicator in the daily chart keeps heading firmly lower, well into negative levels, while the RSI has partially lost its downward strength and currently consolidates at around 24. Meanwhile, moving averages keep grinding lower, far above the current level, reflecting sellers’ dominance.

In the near term, and according to the 4-hour chart, the corrective advance has room to extend but lacks strength. Technical indicators moved away from extreme oversold levels but remain well below their midlines without clear directional momentum. Meanwhile, the 20 SMA maintains its bearish slope, providing dynamic resistance at around 0.9710 and far below the longer ones.

Support levels: 0.9550 0.9505 0.9470

Resistance levels: 0.9630 0.9680 0.9725


Fundamental Overview

The EUR/USD pair started the day positively, but gave up after Wall Street’s opening and resumed its slide, currently trading near the multi-year low set earlier this week at 0.9549.

Several factors affected the pair. On the one hand, the shared currency eased amid a steepening European energy crisis. Several leaks were detected in the Nord Steam pipelines, and according to Gazprom, it is impossible to estimate when the gas transportation will be restored. "This is not a small crack. It's a really big hole," said the Danish Energy Agency, while the Danish government noted that sabotage could not be discarded.


On the other hand, the greenback strengthened on the back of better-than-anticipated US data. August Durable Goods Orders contracted 0.2% in the month, better than the 0.4% setback expected but worse than the previous -0.1%. The core reading, Nondefense Capital Goods Orders ex Aircraft, came much better than anticipated, up 1.3%.  Also, CB Consumer Confidence improved to 108 in September, better than the 104 anticipated by market participants.

US Federal Reserve officials tried to pour cold water into the dollar’s recent strength. Fed’s Charles Evans said he was getting concerned about going too far, too fast with rate hikes but added that his outlook is in line with the Fed's median assessment of rates at 4.25-4.50% at the end of 2022 and at 4.6% end of next year. Neel Kashkari said the central bank is moving “very aggressively” and that there is a high risk of “overdoing it.” Regardless of their comments, Wall Street sold off, further fueling the greenback.

On Wednesday, European Central Bank President Christine Lagarde will participate in the Frankfurt Forum on US-European GeoEconomics, while US Federal Reserve chief Jerome Powell will deliver the opening remarks in a pre-recorded video at the Community Banking Research Conference. The US will also release the August Trade Balance and Pending Home Sales for the same month.



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: No rest for the wicked Premium

EUR/USD: No rest for the wicked

EUR/USD plummeted to 0.9706 on Friday, its lowest since October 2002, to end the week with sharp losses at around 0.9720. Financial markets were on hold throughout the first half of the week, ahead of first-tier events.

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Editors' picks

EUR/USD settles below 0.9600 amid renewed dollar strength

EUR/USD settles below 0.9600 amid renewed dollar strength

The EUR/USD pair approaches its recent multi-year low of 0.9549 as fears took over markets during US trading hours. The escalating EU energy crisis adds pressure on the shared currency.

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GBP/USD retreats from daily highs, trades below 1.0700

GBP/USD retreats from daily highs, trades  below 1.0700

GBP/USD erased a portion of its daily gains in the second half of the day on Tuesday and fell toward 1.0680. The dollar capitalizes on upbeat consumer confidence data and the risk-averse market environment further weighs on the pair.

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USD/JPY: No man’s land hints at further consolidation

USD/JPY: No man’s land hints at further consolidation

The USD/JPY pair has slipped to near 144.27 in the Tokyo session after failing to sustain above the critical resistance of 144.50. The asset is continuously facing barricades above 144.50 despite multiple attempts. On a broader note, the asset is advancing sharply higher after hitting a low of 140.35.

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WTI crude oil portrays a corrective bounce amid Tuesday’s quiet Asian session, around $77.10 by the press time of the pre-European session. In addition to the lack of data/events during early Tuesday, the US dollar’s pullback and hopes of avoiding the recession seem to have favored the energy benchmark’s recovery from the lowest levels since January 2020.

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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.