- EUR/USD drifts higher to 1.0818 on Wednesday.
- The constructive outlook remains intact above the 100-EMA, with a bullish RSI,
- The first upside barrier is seen at 1.0843, initial support level is located at 1.0800-1.0810 regions.
The EUR/USD pair trades on a stronger note around 1.0818 on Wednesday during the early European session. The modest uptick of the pair is bolstered by the weaker Greenback The US Consumer Price Index (CPI) inflation data on Thursday will be the highlights for this week.
Technically, the positive outlook of the major pair remains intact as it holds above the key 100-period Exponential Moving Average (EMA) on the 4-hour chart. The path of least resistance is to the upside, as the Relative Strength Index (RSI) stands in bullish territory near 57.0.
The immediate resistance level for EUR/USD will emerge at 1.0843, the upper boundary of the Bollinger Band. Any follow-through buying above this level will see a rally to 1.0885, a high of May 15. The next hurdle is seen at 1.0915, a high of June 4.
On the flip side, the potential support level is located at the 1.0800-1.0810 zone, representing the lower limit of the Bollinger Band and psychological figure. Further south, the next contention level to watch is 1.0790, the 100-period EMA. A breach of this level will pave the way to 1.0710, a low of July 2.
EUR/USD 4-hour chart
Euro FAQs
The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.
Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.
Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fails to gather traction, remains below 1.1700
EUR/USD fails to gather momentum, trading below 1.1700 at the end of the week. The pair is pulled down by dwindling prospects for an EU-US trade accord, as US President Trump is expected to send a tariff letter to the European Union later today, while the continued demand for the US Dollar also keeps the risk complex under extra pressure.
Meme coins to watch as Bitcoin hits record high
Meme coins Bonk, Dogwifhat, and Floki are positioned to extend gains as the weekly recovery reaches crucial resistance levels. The meme coins gain bullish momentum on the back of Bitcoin’s (BTC) recovery run, hitting a new all-time high on Thursday.
Gold challenges two-week highs near $3,360
Gold gains upside impulse at the end of the week, trading near the $3,360 mark per troy ounce in respose to solid demand from te safe-haven space. Persistent trade uncertainty underpins the ongoing risk-off mood among investors, lending extra wings to the precious metal.
GBP/USD drops below 1.3500, flirts with three-week lows
GBP/USD continues its weekly retracement on Friday, trading at its lowest level in nearly three weeks below the 1.3500 support. The UK's poor GDP statistics drags on the British pound, while the US Dollar continues to profit from safe-haven flows, sending Cable and its risk-related peers to lower levels.
Week ahead – A storm of CPI data and China’s GDP in focus amid trade uncertainty
Dollar attracts safe haven flows amid trade anxiety. US inflation data could shake July Fed cut probability. UK, Canadian and Japanese CPI numbers also on tap. Weak Chinese growth may increase calls for more stimulus.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.