EURUSD Forecast and News
EUR/USD remains stuck near 1.0800 after US employment data
EUR/USD struggles to find direction and moves up and down in a narrow channel at around 1.0800 in the American session on Wednesday. The data from the US showed that employment in the private sector rose less than expected in November and helped the pair limit its losses.
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Technical Overview
The Relative Strength Index (RSI) indicator on the 4-hour chart edged slightly higher after dropping to 70, suggesting that EUR/USD could stage a correction while keeping the bearish bias.
The 200-day Simple Moving Average (SMA) and the Fibonacci 38.2% retracement level of the latest uptrend form a strong resistance for EUR/USD at 1.0820. In case the pair rises above that level, 1.0850 (static level) could be seen as the next bullish target ahead of 1.0900 (Fibonacci 23.6% retracement, 100-period SMA).
On the downside, a daily close below 1.0800 (psychological level) could attract sellers and cause EUR/USD to push lower toward 1.0760 (Fibonacci 50% retracement, 200-period SMA on the 4-hour chart).
Fundamental Overview
EUR/USD is struggling to make a decisive move in either direction on Wednesday and extending its sideways grind at around 1.0800.
The data from the US revealed that employment in the private sector rose by 103,000 in November. This reading came in below the market expectation of 130,000. Additionally, October's reading got revised lower to 106,000 from 103,000. Other data showed that Unit Labor Costs declined by 1.2% in the third quarter.
Although the initial reaction to these data caused the benchmark 10-year US Treasury bond yield to push lower, the US Dollar (USD) managed to hold its ground.
In the meantime, US stock index futures gained traction and were last seen gaining between 0.3% and 0.5%. A bullish opening in Wall Street could make it difficult for the USD to find demand and open the door for a rebound in EUR/USD.
There won't be any other high-tier data releases in the remainder of the day and the risk perception could impact the USD's valuation.
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: Inflation eases, could employment data finally fit central banks' wishes? Premium
The EUR/USD pair started the week on a strong footing but lost momentum and is set to close the week in the red, well below the 1.0900 mark. Market participants mainly traded on sentiment, betting against the US Dollar.
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EUR/USD Bullish Themes
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Editors' picks
EUR/USD remains stuck near 1.0800 after US employment data
EUR/USD struggles to find direction and moves up and down in a narrow channel at around 1.0800 in the American session on Wednesday. The data from the US showed that employment in the private sector rose less than expected in November and helped the pair limit its losses.
GBP/USD battles 1.2600 after US ADP data
GBP/USD is having a difficult time stabilizing above 1.2600 after closing the first two trading days of the week in negative territory. Despite the weaker-than-expected ADP Employment Change data, the US Dollar stays relatively resilient amid cautious market stance.
USD/JPY is steady below 147.45 resistance ahead of the US ADP report
The US Dollar keeps a mild bid tone on the Early European trading session, with the pair trading within a narrow range below the 147.45 resistance area and bears contained above 147.00 so far.
Gold rebounds to $2,030 as US yields stretch lower
Gold recovered toward $2,030 after testing $2,020 earlier in the day. The benchmark 10-year US Treasury bond yield declined to its lowest level in three months below 4.15% after US employment data and helped XAU/USD gain traction.
Oil drops 1% as US production overtakes OPEC+ recent production cuts
Oil prices are looking bearish as markets are pricing in the barrels that the US is releasing to the market. Recent findings show that the US is nearing 6 million barrels per day for export, according to recent ship-tracking data.
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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.