EURUSD Forecast and News


EUR/USD recovers toward 1.0700 ahead of Powell

EUR/USD has managed to stage a rebound toward 1.0700 after having dropped to a fresh multi-week low below 1.0670 in the early American session. With Wall Street's main indexes recovering from opening lows ahead of Powell's speech, the US Dollar loses interest.

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Technical Overview

The EUR/USD pair remained below the 1.0745 level, meeting sellers around it in attempts to recover ground. 1.0745 is the 61.8% Fibonacci retracement of the 2022 slump, and the fact the pair is currently sliding below it is quite an alarm for bulls. Technical readings in the daily chart favor a downward extension, although the momentum is limited. Indicators have crossed their midlines into negative levels but lost their bearish strength. At the same time, the 20 Simple Moving Average (SMA) is flat at around 1.0840, providing dynamic resistance. Finally, the 100 and 200 SMA converge at around 1.0320, with the shorter crossing, the longer one.

In the near term, and according to the 4-hour chart, bears are in control of the pair. Technical indicators resumed their declines after correcting oversold conditions, with the RSI currently at around 29 and without signs of downward exhaustion. Meanwhile, the 20 SMA heads firmly south, having already crossed below the 100 SMA, far above the current level. The 200 SMA, in the meantime, heads nowhere a few pips above the aforementioned Fibonacci level. A steeper decline could be expected on a break below 1.0660, now the immediate support level.

Support levels: 1.0660 1.0615 1.0570

Resistance levels: 1.0745 1.0790 1.0840


Fundamental Overview

 

The EUR/USD pair extended its slide to a fresh three-week low at 1.0969, as demand for the US Dollar prevails ahead of the United State Federal Reserve (Fed) President Jerome Powell's speech. Market participants are still pricing in the latest central bank decisions and the solid employment report published last Friday, both suggesting the Federal Reserve would maintain the tightening course. Policymakers hinted at a potential higher-than-anticipated terminal rate, weighing on chances of a rate cut by year-end. Chair Powell is due to participate in a moderated discussion at the Economic Club of Washington DC after Wall Street’s opening and may or may not make comments on monetary policy.

Stock markets are in a better shape on Tuesday, as most Asian and European indexes stand in the green, helped by earnings reports. US indexes, however, are showing little action ahead of the opening and hover around Monday closing levels. Additionally, US Treasury yields hold on to their recent gains, pressuring multi-week highs and providing support to the US Dollar.

During the European morning, Germany published December Industrial Production, which fell 3.1% in the month, and 3.9% from a year earlier, much worse than anticipated. The United States will release the December Goods and Services Trade Balance, expected to post a deficit of $68.5 billion.



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: King Dollar’s comeback on the table Premium

EUR/USD: King Dollar’s comeback on the table

The EUR/USD pair climbed to its highest since last April last Wednesday, hitting 1.1034 in the US Federal Reserve (Fed) monetary policy decision aftermath.

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Editors' picks

EUR/USD recovers toward 1.0700 ahead of Powell

EUR/USD recovers toward 1.0700 ahead of Powell

EUR/USD has managed to stage a rebound toward 1.0700 after having dropped to a fresh multi-week low below 1.0670 in the early American session. With Wall Street's main indexes recovering from opening lows ahead of Powell's speech, the US Dollar loses interest.

EUR/USD News

GBP/USD rebounds to 1.2000 area as US Dollar loses strength

GBP/USD rebounds to 1.2000 area as US Dollar loses strength

GBP/USD has gained traction and climbed above 1.2000, erasing a large portion of its daily losses. As investors await FOMC Chairman Jerome Powell's speech, the US Dollar is struggling to preserve its strength, allowing the pair to edge higher.

GBP/USD News

USD/JPY fades the recent advance and retreats below 132.00 ahead of Powell

USD/JPY fades the recent advance and retreats below 132.00 ahead of Powell

USD/JPY comes under some moderate downside pressure and probes the area below the 132.00 yardstick on turnaround Tuesday.

USD/JPY News

Gold: Holding above $1,860, but upside still seen limited Premium

Gold: Holding above $1,860, but upside still seen limited

Spot gold saw little action throughout the first half of the day, consolidating its latest losses just above the $1,860.00 threshold. The US Dollar mainly advanced against its European rivals, as certain caution reigned ahead of a speech from US Federal Reserve (Fed) Chairman Jerome Powell, resulting in XAU/USD holding within familiar levels. 

Gold News

WTI aims to recapture $75.00 as China’s recovery hopes soar, Fed Powell’s speech in focus

WTI aims to recapture $75.00 as China’s recovery hopes soar, Fed Powell’s speech in focus

West Texas Intermediate (WTI) is on the verge of capturing the critical resistance of $75.00 in the Asian session. The black gold recovered dramatically after dropping to near $72.60 amid growing hopes of an economic recovery in China after dismantling the pandemic controls.

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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.