EUR/USD Forecast: Euro holds above key support, struggles to gather momentum
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UNLOCK OFFER- EUR/USD fluctuates above 1.0700 to start the new week.
- The technical outlook doesn't yet point to a buildup of recovery momentum.
- The data from Germany showed that business morale weakened in June.
After closing the previous week marginally lower, EUR/USD edges higher and trades above 1.0700 in the European session on Monday. The technical outlook doesn't yet point to a buildup of recovery momentum but the improving risk mood could help the pair stretch higher in the second half of the day.
Euro PRICE Last 7 days
The table below shows the percentage change of Euro (EUR) against listed major currencies last 7 days. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | 0.19% | 1.50% | -0.50% | -0.60% | 0.08% | 0.36% | |
| EUR | 0.10% | 0.32% | 1.64% | -0.39% | -0.59% | 0.23% | 0.47% | |
| GBP | -0.19% | -0.32% | 1.40% | -0.71% | -0.92% | -0.13% | 0.18% | |
| JPY | -1.50% | -1.64% | -1.40% | -1.89% | -2.09% | -1.28% | -1.08% | |
| CAD | 0.50% | 0.39% | 0.71% | 1.89% | -0.17% | 0.57% | 0.89% | |
| AUD | 0.60% | 0.59% | 0.92% | 2.09% | 0.17% | 0.88% | 1.10% | |
| NZD | -0.08% | -0.23% | 0.13% | 1.28% | -0.57% | -0.88% | 0.30% | |
| CHF | -0.36% | -0.47% | -0.18% | 1.08% | -0.89% | -1.10% | -0.30% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The PMI data from the US showed on Friday that the business activity continued to expand at a robust pace in June, helping the US Dollar (USD) preserve its strength ahead of the weekend and not allowing EUR/USD to gain traction.
Early Monday, Germany's Ifo Institute reported that the Business Climate Index declined to 88.6 in June from 89.3 in May. This reading came in weaker than the market expectation of 89.7 but failed to trigger a noticeable market reaction.
The US economic docket will not feature any high-tier data releases that could drive the USD's valuation in the second half of the day. Hence, investors are likely to react to changes in risk perception.
In the European session, US stock index futures gain above 0.2%. A bullish opening in Wall Street could make it difficult for the USD to find demand and help EUR/USD to extend its rebound.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart recovers to 50, reflecting sellers' hesitancy. On the upside, 1.0730-1.0740 (Fibonacci 61.8% retracement of the latest uptrend, 50-period Simple Moving Average) aligns as immediate resistance before 1.0760 (Fibonacci 50% retracement) and 1.0785 (100-period SMA).
On the downside, 1.0670 (Fibonacci 78.6% retracement) stays intact as key support level. If EUR/USD falls below that level and starts using it as resistance, 1.0600 (static level) could be seen as next support.
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.
- EUR/USD fluctuates above 1.0700 to start the new week.
- The technical outlook doesn't yet point to a buildup of recovery momentum.
- The data from Germany showed that business morale weakened in June.
After closing the previous week marginally lower, EUR/USD edges higher and trades above 1.0700 in the European session on Monday. The technical outlook doesn't yet point to a buildup of recovery momentum but the improving risk mood could help the pair stretch higher in the second half of the day.
Euro PRICE Last 7 days
The table below shows the percentage change of Euro (EUR) against listed major currencies last 7 days. Euro was the weakest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.10% | 0.19% | 1.50% | -0.50% | -0.60% | 0.08% | 0.36% | |
| EUR | 0.10% | 0.32% | 1.64% | -0.39% | -0.59% | 0.23% | 0.47% | |
| GBP | -0.19% | -0.32% | 1.40% | -0.71% | -0.92% | -0.13% | 0.18% | |
| JPY | -1.50% | -1.64% | -1.40% | -1.89% | -2.09% | -1.28% | -1.08% | |
| CAD | 0.50% | 0.39% | 0.71% | 1.89% | -0.17% | 0.57% | 0.89% | |
| AUD | 0.60% | 0.59% | 0.92% | 2.09% | 0.17% | 0.88% | 1.10% | |
| NZD | -0.08% | -0.23% | 0.13% | 1.28% | -0.57% | -0.88% | 0.30% | |
| CHF | -0.36% | -0.47% | -0.18% | 1.08% | -0.89% | -1.10% | -0.30% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
The PMI data from the US showed on Friday that the business activity continued to expand at a robust pace in June, helping the US Dollar (USD) preserve its strength ahead of the weekend and not allowing EUR/USD to gain traction.
Early Monday, Germany's Ifo Institute reported that the Business Climate Index declined to 88.6 in June from 89.3 in May. This reading came in weaker than the market expectation of 89.7 but failed to trigger a noticeable market reaction.
The US economic docket will not feature any high-tier data releases that could drive the USD's valuation in the second half of the day. Hence, investors are likely to react to changes in risk perception.
In the European session, US stock index futures gain above 0.2%. A bullish opening in Wall Street could make it difficult for the USD to find demand and help EUR/USD to extend its rebound.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) indicator on the 4-hour chart recovers to 50, reflecting sellers' hesitancy. On the upside, 1.0730-1.0740 (Fibonacci 61.8% retracement of the latest uptrend, 50-period Simple Moving Average) aligns as immediate resistance before 1.0760 (Fibonacci 50% retracement) and 1.0785 (100-period SMA).
On the downside, 1.0670 (Fibonacci 78.6% retracement) stays intact as key support level. If EUR/USD falls below that level and starts using it as resistance, 1.0600 (static level) could be seen as next support.
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.
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