- EUR/USD holds comfortably above 1.1000 in the European session on Monday.
- The pair could face next technical resistance at 1.1060.
- A negative shift in risk mood could limit EUR/USD's upside.
EUR/USD benefited from the broad-based selling pressure surrounding the US Dollar (USD) on Friday and gained more than 1% for the week. The pair holds its ground early Monday and trades at a fresh 2024-high near 1.1050.
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 strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.21% | -1.63% | -0.35% | -0.52% | -1.74% | -1.14% | -0.23% | |
| EUR | 1.21% | -0.40% | 0.87% | 0.69% | -0.65% | 0.08% | 1.00% | |
| GBP | 1.63% | 0.40% | 1.52% | 1.11% | -0.26% | 0.46% | 1.41% | |
| JPY | 0.35% | -0.87% | -1.52% | -0.15% | -1.46% | -0.80% | 0.10% | |
| CAD | 0.52% | -0.69% | -1.11% | 0.15% | -1.28% | -0.63% | 0.32% | |
| AUD | 1.74% | 0.65% | 0.26% | 1.46% | 1.28% | 0.72% | 1.68% | |
| NZD | 1.14% | -0.08% | -0.46% | 0.80% | 0.63% | -0.72% | 0.95% | |
| CHF | 0.23% | -1.00% | -1.41% | -0.10% | -0.32% | -1.68% | -0.95% |
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 upbeat risk mood and falling US Treasury bond yields made it difficult for the USD to find demand heading into the weekend.
On Sunday, Federal Reserve Bank (Fed) of San Francisco President Mary Daly told the Financial Times that the US central bank needs to take a gradual approach to lowering borrowing costs. Meanwhile, Chicago Fed President Austan Goolsbee noted that there was no certainty the Fed will cut interest rates in September but added that not doing so could damage the labour market.
The USD stays on the back foot in the European morning and helps EUR/USD hold its ground. The economic calendar will not feature any high-tier macroeconomic data releases on Monday. Investors will scrutinize comments from Fed Governor Christopher Waller and pay close attention to changes in risk perception.
At the time of press, US stock index futures were trading marginally lower on the day. In case Wall Street's main indexes open lower, the USD could benefit from the souring mood and limit EUR/USD's upside.
EUR/USD Technical Analysis
EUR/USD holds above the ascending trend channel but the Relative Strength Index (RSI) indicator on the 4-hour chart stays above 70, suggesting that the pair could stage a technical correction before the next leg higher.
On the downside, 1.1000 (psychological level, static level, ascending trend line) aligns as strong support before 1.0960 (50-period Simple Moving Average (SMA), static level) and 1.0910 (100-period SMA).
1.1060 (static level) could be seen as next resistance before 1.1100 (psychological level, static level) and 1.1140 (December 28, 2023, high).
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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