EUR/USD Forecast: Can the ECB save the Euro?

EUR/USD edged lower to the 1.0550 area early Thursday.
The ECB is widely expected to leave key rates unchanged.
The US economic docket will feature third-quarter growth data.

Eren Sengezer FXStreet

EUR/USD stretched to a fresh weekly low below 1.0550 early Thursday after closing in negative territory for the second consecutive day on Wednesday.

The US Dollar (USD) outperformed its rivals mid-week, supported by rising US Treasury bond yields. Additionally, the negative shift witnessed in risk mood on news of Israel preparing for a ground assault allowed the USD to find demand as a safe haven.

Markets remain risk-averse early Thursday, with the US stock index futures and the Euro Stoxx 50 trading deep in the red.

Euro price this week

The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the weakest against the US Dollar.

	USD	EUR	GBP	CAD	AUD	JPY	NZD	CHF
USD		0.40%	0.64%	0.65%	0.13%	0.33%	0.38%	0.70%
EUR	-0.41%		0.24%	0.24%	-0.27%	-0.08%	-0.01%	0.30%
GBP	-0.64%	-0.25%		0.01%	-0.52%	-0.31%	-0.27%	0.07%
CAD	-0.65%	-0.25%	-0.02%		-0.52%	-0.32%	-0.26%	0.05%
AUD	-0.14%	0.30%	0.52%	0.52%		0.21%	0.24%	0.58%
JPY	-0.34%	0.06%	0.27%	0.30%	-0.26%		0.01%	0.36%
NZD	-0.37%	0.02%	0.25%	0.26%	-0.25%	-0.05%		0.32%
CHF	-0.71%	-0.31%	-0.07%	-0.06%	-0.58%	-0.38%	-0.32%

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 Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

The European Central Bank (ECB) is widely expected to leave key rates unchanged following the October policy meeting. In case the ECB leaves the door open for additional tightening in the near future, the initial reaction could provide a boost to the Euro. Market participants will also pay close attention to the language in the policy statement and ECB President Christine Lagarde's comments.

If the ECB acknowledges softening inflation and adopts a more concerned tone regarding the growth outlook, this could be seen as a dovish language and hurt the Euro. On the other hand, EUR/USD could find support in case the ECB puts more emphasis on inflation risks rather than the growth outlook.

Before Lagarde's press conference starts at 12:45 GMT, the US Bureau of Economic Analysis (BEA) will release the first estimate of the third-quarter Gross Domestic Product (GDP) growth. Investors forecast the US economy to register an annualized growth of 4.2% in the third quarter. A disappointing reading at or below 3.5% could cause the USD to weaken with the initial reaction. With a print close to the market consensus, the Euro's reaction to the ECB policy announcements could drive EUR/USD's action.

EUR/USD Technical Analysis

The Relative Strength Index (RSI) indicator on the four-hour chart declined to 40 and EUR/USD closed the last two 4-hour candles below the 50-period and the 100-period Simple Moving Averages (SMA), highlighting a build-up of bearish momentum.

On the downside, 1.0520 (static level) aligns as interim support before 1.0500 (psychological level, static level) and 1.0450 (end-point of the latest downtrend).

In case EUR/USD manages to reclaim 1.0570 (Fibonacci 23.6% retracement of the latest downtrend, 50-period SMA, 100-period SMA), 1.0600 (200-period SMA) could act as next resistance ahead of 1.0640 (Fibonacci 38.2% retracement).

Premium

You have reached your limit of 3 free articles for this month.

Start your subscription and get access to all our original articles.

Subscribe to Premium Sign In

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

EUR/USD hovers around nine-day EMA above 1.1800

EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold eyes acceptance above $5,000, kicking off a big week

Gold is consolidating the latest uptick at around the $5,000 mark, with buyers gathering pace for a sustained uptrend as a critical week kicks off. All eyes remain on the delayed Nonfarm Payrolls and Consumer Price Index data from the United States due on Wednesday and Friday, respectively.

Top Crypto Gainers: Aster, Decred, and Kaspa rise as selling pressure wanes

Altcoins such as Aster, Decred, and Kaspa are leading the broader cryptocurrency market recovery over the last 24 hours, as Bitcoin holds above $70,000 on Monday, up from the $60,000 dip on Thursday.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.