EURUSD Forecast and News
EUR/USD drops toward 1.0700 after US jobs report
EUR/USD came under renewed bearish pressure in the second half of the day on Friday and declined toward 1.0700. Stronger-than-expected Nonfarm Payrolls (NFP) data helps the US Dollar gather strength ahead of the weekend and forces the pair to stay on the back foot.
Latest EUR News
Technical Overview
EUR/USD moves up and down between 1.0780 (100-period Simple Moving Average (SMA)) and 1.0750 (Fibonacci 23.6% retracement of the latest downtrend). The pair needs to break out of this channel to gather directional momentum.
Above 1.0780, 1.0820 (Fibonacci 38.2% retracement) aligns as next hurdle ahead of 1.0870 (Fibonacci 50% retracement) and 1.0900 (psychological level, 200-period SMA).
On the downside, a four-hour close below 1.0750 could attract sellers and open the door for an extended slide toward 1.0730 (50-period SMA), 1.0700 (psychological level) and 1.0650 (the end-point of the downtrend).
Fundamental Overview
EUR/USD has edged slightly lower after having climbed toward 1.0800 on Thursday, with investors moving to the sidelines ahead of the highly-anticipated May jobs report from the US, which could influence the market pricing of the next Federal Reserve (Fed) rate decision.
On Thursday, dovish Fed expectations continued to dominate the financial markets, weighing heavily on US Treasury bond yields and the US Dollar (USD). The US Bureau of Labor Statistics revised the increase in Unit Labor Costs in the first quarter to 4.2% from 6.3% in the advanced estimate. Additionally, Philadelphia Federal Reserve Bank President Patrick Harker reiterated that he believes it is time for the central bank to 'hit the stop button' for at least one meeting.
Nonfarm Payrolls in the US are forecast to rise 190,000 in May following the better-than-expected 253,000 increase recorded in April. The Unemployment Rate is expected to tick up to 3.5% from 3.4% and the annual wage inflation, as measured by the change in Average Hourly Earnings, is seen holding steady at 4.4%.
According to the CME Group FedWatch Tool, markets are currently pricing in a 71.5% probability of the Fed leaving the key rate unchanged at 5%-5.25% in June. The market positioning suggests that the USD is likely to weaken further in case the labor market data confirm a pause in the Fed's tightening cycle at the upcoming meeting. For that scenario to materialize, a disappointing NFP print, at or below 150,000, and a softer wage inflation reading might be required.
On the other hand, investors could reassess the possibility of one more 25 basis points (bps) rate hike if NFP rises 250,000 or more in May. In that case, the USD could regather its strength and cause EUR/USD to turn bearish.
It's also worth noting that the Fed's blackout period will start on Saturday. Hence, Fed policymakers could deliver remarks to steer the market expectations in a certain direction, ramping up market volatility ahead of the weekend.
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: Bulls fight back as chances of a Fed hike remain subdued Premium
The EUR/USD pair fell throughout the first half of the week, changing course on Thursday after bottoming on Wednesday at 1.0634, its lowest in more than two months.
Big Picture
EUR/USD Bullish Themes
EUR/USD Bearish Themes
Latest EUR Analysis
Editors' picks
EUR/USD drops toward 1.0700 after US jobs report
EUR/USD came under renewed bearish pressure in the second half of the day on Friday and declined toward 1.0700. Stronger-than-expected Nonfarm Payrolls (NFP) data helps the US Dollar gather strength ahead of the weekend and forces the pair to stay on the back foot.
GBP/USD extends slide below 1.2450 amid a stronger USD
GBP/USD dropped further and hit fresh daily lows below 1.2450 amid a stronger US dollar. The Greenback remains firm following the release of the US May jobs report. Despite losing almost 100 pips on Friday, GBP/USD is still on track for a weekly gain.
USD/JPY spikes and retreats on mixed US NFP report, up a little above 139.00 mark
The USD/JPY pair jumps to a fresh daily high, around the 139.45 region, during the early North American session, albeit meets with a fresh supply at higher levels. Spot prices quickly retreat to the lower end of the daily range and currently trade just above the 139.00 mark following the release of the mixed US monthly jobs data.
Gold falls below $1,960 as US yields rebound after US jobs data
Gold price turned south and declined below $1,960 on Friday. After the data from the US revealed that Nonfarm Payrolls rose 339,000 in May, the benchmark 10-year US Treasury bond yield gained more than 2% and recovered toward 3.7%, weighing heavily on XAU/USD.
Oil price bounces after Senate gives debt-ceiling bill the green light
Oil price rallies for the second day on Friday as global markets breathe a sigh of relief after the US Senate votes through the debt-ceiling extension bill, vaulting the final hurdle prior to implementation. Increasing expectations that the US Federal Reserve (Fed) will pause on hiking rates at the next Fed meeting in mid-June caps the US Dollar’s progress, further helping Oil, which is priced in USD.
Majors
Cryptocurrencies
Signatures
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.