EURUSD Forecast and News
EUR/USD loses traction, retreats below 1.0600
EUR/USD lost its recovery momentum and declined below 1.0600 in the American session on Friday, erasing a portion of its daily gains in the process. Nevertheless, the risk-positive market atmosphere after PCE inflation data helps the pair limit its losses.
Latest EUR News
Technical Overview
The sharp rebound following the lowest daily close of the year so far has improved the outlook for the Euro, although the overall trend remains bearish. A recovery rally could potentially extend to 1.0700 without disrupting the bearish trend.
On the 4-hour chart, technical indicators suggest a slight upside risk ahead of the Asian session. However, the area around 1.0580 has acted as a strong resistance level. It is a key zone that needs to be surpassed for the Euro to pave the way for further gains, initially targeting 1.0600 and then 1.0630. Conversely, a consolidation below 1.0550 would increase bearish pressure, exposing support levels at 1.0520 and 1.0495.
Fundamental Overview
On Thursday, the EUR/USD experienced a sharp rise, rebounding from monthly lows and approaching the 1.0600 level. This move was primarily driven by a correction in the US Dollar, which took a pause after a prolonged period of gains.
Market sentiment weighed on the US Dollar, while US economic data continued to indicate a robust economy. Second-quarter GDP growth data showed the economy expanding at a 2.1% annualized rate, and Initial Jobless Claims came in lower than expected at 204,000. The key economic release of the week will be the Core Personal Consumption Expenditure Price Index, which, if it shows evidence of a rebound in inflation, could trigger a rally in the US Dollar across the board.
Comments from European Central Bank (ECB) members have had minimal impact on the Euro at the moment. Market expectations for no rate hike in October and small odds for December are prevailing. The perception that the ECB has reached its peak is strong currently. However, data remains critical, and on Thursday, the central bank received welcome news that helped support the Euro.
The annual inflation rate in Germany fell from 6.1% to 4.5%, while business and consumer sentiment indicators declined but less than expected. On Friday, Eurostat will release the Eurozone Harmonized Index of Consumer Prices, expected at 4.5% (down from 5.2%) for the headline rate and 4.8% (down from 5.3%) for the core rate.
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: Optimism not enough to take the US Dollar down Premium
The EUR/USD plummeted to 1.0487 on Wednesday, its lowest since early March, as investors continued to seek refugee in the US Dollar. Financial markets were in risk-averse mode following central banks’ monetary policy decisions from earlier this month, as despite holding fire, most policymakers reaffirmed the inflation risks remain high and rates should stay higher for longer to maintain price pressures under control.
Big Picture
EUR/USD Bullish Themes
EUR/USD Bearish Themes
Latest EUR Analysis
Editors' picks
EUR/USD loses traction, retreats below 1.0600
EUR/USD lost its recovery momentum and declined below 1.0600 in the American session on Friday, erasing a portion of its daily gains in the process. Nevertheless, the risk-positive market atmosphere after PCE inflation data helps the pair limit its losses.
GBP/USD turns negative on the day below 1.2200
GBP/USD reversed its direction and slumped below 1.2200 in the American session on Friday after rising above 1.2270 earlier in the day. Position readjustments and profit-taking on the last trading day of the quarter seems to be weighing on Pound Sterling.
USD/JPY discovers support near 148.50 as focus shifts to US PCE inflation
The USD/JPY pair attracts bids near 148.50 and rebounds strongly in the European session. The asset finds cushion despite hopes of a stealth intervention by the Bank of Japan (BoJ) in the FX domain to support the Japanese Yen against excessive volatility.
Gold reverses direction, drops below $1,860
Following a steady rebound toward $1,880 on Friday, Gold price made a sharp U-turn and turned negative on the day near $1,860. Although the 10-year US T-bond yield is down more than 1%, XAU/USD struggles to find demand on the last day of Q3.
WTI treads waters near $91.00 with a negative bias, awaits US Core PCE
Crude oil prices struggle to recover from recent losses due to market caution on the Fed’s interest rates trajectory, which impacts economic activities. The higher interest costs raise borrowing costs, which can affect the demand for Crude oil.
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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 2023 EURUSD forecast!
EURUSD FORECAST 2023
In the EURUSD 2023 Forecast, our analyst, Valeria Bednarik, expects the EUR/USD long-term corrective advance will likely continue in the first quarter of 2023. By the end of the year 2022, the average outlook for the pair was 1.0538. Read more details about the forecast.
From Jan 2022 to Dec 2022, the maximum level for the EURUSD (Euro US Dollar) was 1.1455 (on 06/02/22), and the minimum, 0.9589 (on 27/09/22).
MOST INFLUENTIAL POLITICAL EVENTS IN 2023 FOR EURUSD
Heading into 2023, there is uncertainty over central banks succeeding in guiding economies into a soft landing. That is, controlling inflation without triggering recessions. As said, price pressures are still too high, with inflation running over three times faster than tolerable. The European energy crisis could easily turn into a global one next winter, affecting both Euro and US Dollar. The worldwide economic growth is expected to keep slowing, which could also be a decisive key driver for the pair during the 2023.
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.