• EUR/USD struggles for direction around the 1.18 area.
  • The dollar remains on the positive path and records 2021 highs.
  • US final Q4 GDP came in at 4.3% QoQ, surpassing consensus.

The single currency stays well on the defensive and drags EUR/USD to fresh YTD lows in sub-1.1800 levels on Thursday.

EUR/USD in 4-month lows

EUR/USD extends the leg lower to levels below the 1.1800 yardstick for the first time since November 2020 on the back of the unabated upside momentum in the greenback.

In fact, the prospects of a solid recovery in Europe now appear dented, as investors keep adjusting to the possibility of another wave of the pandemic in combination with increasing lockdown restrictions in several countries.

Earlier in the session, the German Consumer Confidence tracked by GfK bettered to -6.2 for the month of April, while Business Confidence in France stayed unchanged at 98 for the current month. Results from the ECB showed that M3 Money Supply expanded 13.3% on a year to January, surpassing forecasts, while Private Sector Loans increased 3.0% from a year earlier.

In the US, final Q4 GDP figures noted the economy expanded 4.3% QoQ and Initial Claims went up by 684K WoW during last week.

What to look for around EUR

EUR/USD remains under heavy pressure and puts the 1.1800 neighbourhood to the test amidst increasing upside pressure around the dollar. In fact, the persistent solid performance of the greenback has been undermining the constructive view in the pair in the past weeks, as market participants continue to adjust to higher US yields, the outperformance of the US economy (vs. its G10 peers) and the deterioration of the morale in Euroland. However, the steady hand from the ECB (despite some verbal concerns) in combination with the expected rebound of the economic activity in the region in the post-pandemic stage is likely to prevent a much deeper pullback in the pair.

Key events in the euro area this week: European Council meeting (Thursday and Friday).

Eminent issues on the back boiler: Potential ECB action to curb rising European yields. EUR appreciation could trigger ECB verbal intervention, especially amidst the future context of subdued inflation. Probable political effervescence around the EU Recovery Fund.

EUR/USD levels to watch

At the moment, the index is losing 0.13% at 1.1796 and faces the next support at 1.1791 (2021 low Mar.25) seconded by 1.1762 (78.6% Fibo of the November-January rally) and finally 1.1602 (monthly low Nov.4). On the other hand, a breakout of 1.1989 (weekly high Mar.11) would target 1.2000 (psychological level) en route to 1.2038 (50-say SMA).

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD falls toward 0.9600 amid renewed dollar strength

EUR/USD has turned south and declined toward 0.9600 in the second half of the day on Monday. A sharp decline witnessed in the GBP/USD pair and the souring market mood provided a boost to the dollar, lifting the US Dollar Index back above 114.00. 

EUR/USD News

GBP/USD falls below 1.0700 following BoE statement

GBP/USD falls below 1.0700 following BoE statement

GBP/USD came under renewed bearish pressure and slumped below 1.0700 during the American trading hours. In a statement published on Monday, the Bank of England said that they welcome the government's commitment to sustainable economic growth, triggering another GBP selloff.

GBP/USD News

Gold could soon challenge the $1,600 level

Gold could soon challenge the $1,600 level

Demand for the dollar continued at the beginning of the week, resulting in XAUUSD plummeting to $1,626.67, its lowest since April 2020. Concerns about potential recessions undermined the dismal market’s mood, pushing the greenback higher despite its extreme overbought conditions.

Gold News

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin: Investors need to prepare for volatile breakout

Bitcoin price has been devoid of volatility for the last week and has been in a tight consolidation without directional bias whatsoever. This range bound move has formed a triangle pattern which could break either way. 

Read more

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

Three stocks that will be in the news this week: Amazon, Nike, Micron Technology

The S&P 500 index lost 4.1% last week and left traders melancholy with another week to go in this dreadful September. The S&P 500 index is down 6.6% so far in the month that is already known for poor performance, and most seem to think the pain will continue. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures