- EUR/USD trades at its lowest level in over a year below 1.0500.
- The technical outlook suggests that the pair is about to turn oversold.
- Investors await PMI data releases from Germany, the Eurozone and the US.
EUR/USD came under renewed bearish pressure in the American session on Thursday and touched its lowest level since October 2023 below 1.0500. The pair struggles to find a foothold early Friday as investors await key macroeconomic data releases.
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 Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.59% | 0.40% | 0.37% | -0.81% | -0.61% | 0.49% | -0.19% | |
| EUR | -0.59% | -0.03% | -0.13% | -1.29% | -1.05% | 0.00% | -0.67% | |
| GBP | -0.40% | 0.03% | -0.08% | -1.26% | -1.02% | 0.04% | -0.64% | |
| JPY | -0.37% | 0.13% | 0.08% | -1.19% | -0.91% | 0.17% | -0.49% | |
| CAD | 0.81% | 1.29% | 1.26% | 1.19% | 0.23% | 1.31% | 0.63% | |
| AUD | 0.61% | 1.05% | 1.02% | 0.91% | -0.23% | 1.07% | 0.38% | |
| NZD | -0.49% | -0.01% | -0.04% | -0.17% | -1.31% | -1.07% | -0.67% | |
| CHF | 0.19% | 0.67% | 0.64% | 0.49% | -0.63% | -0.38% | 0.67% |
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 US Dollar (USD) benefited from upbeat US data and hawkish comments from Federal Reserve (Fed) officials on Thursday, forcing EUR/USD to turn south in the second half of the day.
"Over the next year, it feels like rates will end up a fair bit lower than they are today," Chicago Fed President Austan Goolsbee said and argued that it may make sense to slow the pace of interest rate cuts as the Fed gets close to where rates will settle.
Preliminary November HCOB Manufacturing and Services Purchasing Managers Index (PMI) data from Germany and the Eurozone will be featured in the European economic calendar. In case Services PMI unexpectedly falls into the contraction territory below 50 either in Germany or the Eurozone, the immediate reaction could cause the Euro to weaken further against its major rivals.
Later in the day, S&P Global Manufacturing and Services PMI data for the US will be watched closely by market participants. If the Manufacturing PMI recovers above 50 and the Services PMI comes in near October's final print of 55, the USD could preserve its strength heading into the weekend and force EUR/USD to stretch lower.
EUR/USD Technical Analysis
EUR/USD trades near the mid-point of the descending regression channel and the Relative Strength Index (RSI) indicator on the 4-hour chart stays close to 30, suggesting that the pair could stage a technical correction before falling further.
On the upside, 1.0500 (former support, static level) aligns as first resistance before 1.0540 (20-period Simple Moving Average (SMA)) and 1.0570 (50-period SMA, upper limit of the descending channel). Looking south, supports could be spotted at 1.0400 (lower limit of the descending channel) and 1.0360 (static level from May 2023).
Euro FAQs
The Euro is the currency for the 19 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 recovers from two-year lows, stays below 1.0450
EUR/USD recovers modestly and trades above 1.0400 after setting a two-year low below 1.0350 following the disappointing PMI data from Germany and the Eurozone on Friday. Market focus shifts to November PMI data releases from the US.
GBP/USD falls to six-month lows below 1.2550, eyes on US PMI
GBP/USD extends its losses for the third successive session and trades at a fresh fix-month low below 1.2550 on Friday. Disappointing PMI data from the UK weigh on Pound Sterling as investors await US PMI data releases.
Gold price refreshes two-week high, looks to build on momentum beyond $2,700 mark
Gold price hits a fresh two-week top during the first half of the European session on Friday, with bulls now looking to build on the momentum further beyond the $2,700 mark. This marks the fifth successive day of a positive move and is fueled by the global flight to safety amid persistent geopolitical tensions stemming from the intensifying Russia-Ukraine war.
S&P Global PMIs set to signal US economy continued to expand in November
The S&P Global preliminary PMIs for November are likely to show little variation from the October final readings. Markets are undecided on whether the Federal Reserve will lower the policy rate again in December.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.