EURUSD Forecast and News
EUR/USD holds lower ground near 1.0800 ahead of Eurozone GDP
EUR/USD is extending losses to test 1.0800 in the European session. The pair has come under renewed selling pressure, as the US Dollar rebounds amid risk-off markets and sluggish Treasury yields. Eurozone GDP and US data are in focus.
Latest EUR News
Technical Overview
EUR/USD has extended its slide to a fresh 10-day low near 1.0800 after having closed in negative territory on Monday. The pair's near-term technical outlook suggests that sellers retain control of the action for the time being. In the second half of the day, market participants will keep a close eye on the performance of Wall Street's main indexes.
The risk-averse market environment helped the US Dollar outperform its rivals in the second half of the day. In the absence of high-impact macroeconomic data releases, major equity indexes in the US staged a deep correction on the first trading of the day. Additionally, the benchmark 10-year US Treasury bond yield continued to edge higher above 3.5% and provided an additional boost to the US Dollar.
Early Tuesday, the data from Germany showed that Retail Sales in December declined by 5.3% on a monthly basis. This reading came in mush weaker than the market expectation for an increase of 0.2% and made it difficult for the Euro to stage a rebound.
Later in the session, Eurostat will release the Gross Domestic Product (GDP) growth data for the fourth quarter. Investors expect the annualized expansion to decline to 1.8% from 2.3% in the third quarter. Ahead of the European Central Bank's (ECB) policy announcements, a weaker-than-forecast GDP print could hurt the Euro and vice versa.
In the second half of the day, the Conference Board's January Consumer Confidence Index will be featured in the US economic docket alongside Housing Price Index data for November. Investors are, however, unlikely to take positions based on these data while awaiting the Federal Reserve's policy announcements on Wednesday. Hence, the risk perception could dominate EUR/USD's action in the American session.
It's also worth noting that month-end flows could ramp up the volatility and cause inter-market correlations to weaken toward the end of the European session.
Fundamental Overview
EUR/USD broke below the 100-period Simple Moving Average (SMA) on the four-hour chart for the first time since the beginning of the latest uptrend in early January. Additionally, the Relative Strength Index (RSI) indicator on the same chart declined below 50, confirming the bearish shift.
On the downside, 1.0800 (psychological level) aligns as interim support ahead of 1.0760 (Fibonacci 38.2% retracement) and 1.0730 (200-period SMA).
The 1.0820/30 area, where the 100-period SMA and the Fibonacci 23.6% retracement align, forms critical resistance. Only a four-hour close above that level could discourage sellers and open the door for an extended recover toward 1.0870 (50-period SMA) and 1.0900 (psychological level, static level).
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: A test of 1.1000 remains on the cards in key central bank week Premium
Despite having touched its highest level since April above 1.0900 at the beginning of the week, EUR/USD has struggled to gather further bullish momentum. The Federal Reserve (Fed) and the European Central Bank's (ECB) policy meetings next week could trigger the next directional move in the pair.
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EUR/USD Bullish Themes
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Editors' picks
EUR/USD holds lower ground near 1.0800 ahead of Eurozone GDP
EUR/USD is extending losses to test 1.0800 in the European session. The pair has come under renewed selling pressure, as the US Dollar rebounds amid risk-off markets and sluggish Treasury yields. Eurozone GDP and US data are in focus.
GBP/USD remains pressured toward 1.2300 amid risk aversion
GBP/USD is losing further ground toward 1.2300 in the European trading hours. The renewed uptick in the US Dollar amid risk aversion is weighing down on the pair. Meanwhile, the IMF said that the UK economy is the only G7 nation to shrink in 2023.
USD/JPY bears eye a test of 130.00 pre Federal Reserve
USD/JPY is under pressure in Tokyo but the bulls are moving in from a support area as the following charts will illustrate. Meanwhile, the US Dollar rose on Monday, ahead of the Federal Reserve's two-day policy meeting which is likely to keep traders at bay and USD/JPY range bound until the outcome of the meeting.
Gold drops towards $1,900 on firmer US Dollar, mixed sentiment
Gold price holds lower grounds as sellers attack the critical $1,900 mark during Tuesday’s European session. The precious metal reverses the mid-Asian session’s corrective bounce, as the US Dollar recovery picks up pace ahead of US mid-tier data.
WTI stays below $78.00 as Western central banks set for their first rate hike of 2023
West Texas Intermediate (WTI), futures on NYMEX, have shifted their auction below the crucial support of $78.00 in the early Asian session. On Monday, the oil price extends its losses after failing to hold the psychological resistance of $80.00. Rising fears of a global recession as western central banks are expected to hike their interest rates further have weakened oil demand projections dramatically.
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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.
ECB Official Website, on Twitter and YouTube
The Federal Reserve Bank (Fed)
On the other
FED Official Website, on Twitter and Facebook
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).
Lagarde on ECB'S Profile and Wikipedia
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.
Jerome Powell Fed's Profile and Wikipedia
ECB NEWS & ANALYSIS
FED NEWS & ANALYSIS
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.