- EUR/USD faces significant offers near 1.0800 as the US Dollar resumes its upside trend.
- Trump’s victory has improved the US Dollar’s long-term outlook.
- The Euro is down amid Trump tariffs’ threats, German political uncertainty, and doubts over the Eurozone economic outlook.
EUR/USD faces selling pressure near the key resistance of 1.0800 in European trading hours on Friday. The major currency pair fails to extend Thursday’s recovery as the US Dollar (USD) resumes its upside journey after a sharp correction.
The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, bounces back to nearly 104.65. The index had retraced to nearly 104.20 on Thursday following the more than four-month high of 105.50 registered after Donald Trump won the presidential election in the United States (US).
The reasoning behind the US Dollar’s recovery can be attributed to the victory of Trump, who vowed to raise import tariffs by 10% and lower corporate taxes in his election campaign. Market experts suggest that Trump’s fiscal policy, if implemented, would result in higher investment, spending and labor demand, which will elevate upside risks to inflation and force the Federal Reserve (Fed) to opt for a restrictive monetary policy stance.
Fed Chair Jerome Powell said on Thursday that he doesn’t see any near-term effect of Trump’s return to the White House regarding the central bank’s policy decisions. “We don’t guess, speculate and we don’t assume what future government policy choices will be,” Powell said after the bank decided to cut interest rates by 25 basis points (bps) to 4.50%-4.75%, as expected.
When asked about the interest rate path ahead, Powell sounded confident about the continuation of the policy-easing cycle by saying he is optimistic about inflation remaining on track to the bank’s target of 2% with some softness in labor market conditions.
Daily digest market movers: EUR/USD drops as Euro stays on backfoot
- EUR/USD is also facing pressure due to the Euro’s (EUR) underperformance against its major peers, except for Asia-Pacific currencies. The Euro is down as investors are worried about the Eurozone economic outlook due to Trump’s victory, the dissolution of Germany’s three-party coalition, and growing risks of inflation remaining below the European Central Bank’s (ECB) target of 2%.
- Higher tariffs by the US would strain the Eurozone’s export sector, likely hitting economic growth. “Uncertainty is high on many levels, from the exact impact of US tariffs to the timing of their implementation to how and when Europe responds,” Deutsche Bank analysts said.
- Meanwhile, the Deutsche Bank also sees the ECB’s Deposit Facility rate heading to 1.5%, down from the 2.25% previously projected, due to weakening macroeconomic conditions and inflation risks falling below target.
- The collapse of the German coalition after Chancellor Olaf Scholz dismissed Federal Minister of Finance Christian Lindner has paved the way for snap elections in early 2025. The scenario of political uncertainty limits the growth potential of an economy due to the postponement of fiscal spending by the government.
Euro PRICE Today
The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Australian Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | 0.26% | 0.19% | -0.44% | 0.25% | 0.63% | 0.36% | -0.15% | |
EUR | -0.26% | -0.06% | -0.66% | -0.01% | 0.37% | 0.11% | -0.41% | |
GBP | -0.19% | 0.06% | -0.59% | 0.05% | 0.43% | 0.16% | -0.35% | |
JPY | 0.44% | 0.66% | 0.59% | 0.69% | 1.07% | 0.79% | 0.28% | |
CAD | -0.25% | 0.00% | -0.05% | -0.69% | 0.37% | 0.11% | -0.40% | |
AUD | -0.63% | -0.37% | -0.43% | -1.07% | -0.37% | -0.27% | -0.79% | |
NZD | -0.36% | -0.11% | -0.16% | -0.79% | -0.11% | 0.27% | -0.51% | |
CHF | 0.15% | 0.41% | 0.35% | -0.28% | 0.40% | 0.79% | 0.51% |
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).
Technical Analysis: EUR/USD falls back from 1.0800
EUR/USD resumes decline after a short-lived recovery to near 1.0800 in Friday’s European session. The near-term trend of the major currency pair remains bearish as the 20-day and 50-day Exponential Moving Averages (EMAs) near 1.0860 and 1.0920, respectively, continue to decline.
The 14-day Relative Strength Index (RSI) wobbles near 40.00. A bearish momentum would resume if the RSI (14) slides below the above-mentioned level.
The upward-sloping trendline, plotted from the April 16 low of around 1.0600, will act as a key resistance zone for Euro bulls around 1.0800. Looking down, the shared currency pair could decline to the year-to-date (YTD) low of 1.0600
Economic Indicator
Presidential Election
The US Presidential Election decides the President and the Vice President of the United States. It is a significant event that can influence the appropriate stance of monetary policy as it is key for the long-run goals of price stability and sustainable economic growth. Voters also elect all 435 members to the US House of Representatives and 33 members to the Senate. The election might affect the USD volatility.
Read more.
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 remains pressured below 1.0800, US data eyed
EUR/USD is trading under pressure below 1.0800 in European trading on Friday. A renewed US Dollar uptick and a cautious mood weigh on the pair, as traders digest the Trump win and the Fed rate cut ahead of the US preliminary Consumer Sentiment data for November.
GBP/USD holds lower ground near 1.2950 amid tepid risk sentiment
GBP/USD edges lower toward 1.2950 in the European session on Friday. The emergence of dip-buying in the US Dollar and a tepid risk tone undermine the pair. The BoE’s cautious rate cut could check the pair's downside as traders look to BoE-speak, US data for fresh incentives.
Gold price seems vulnerable while below $2,700 amid stronger USD, positive risk tone
Gold price drops to the $2,680 area during the first half of the European session on Friday and is pressured by a combination of factors. Hopes that Trump's policies would spur economic growth and inflation, to a larger extent, overshadow the Fed's dovish outlook, which, in turn, helps revive the USD demand.
Bitcoin touches new all-time high near $77,000 following Fed rate cut
Bitcoin price rallied and reached a new all-time high of $76,849 following the US Federal Reserve’s 25 basis point rate cut. Ethereum and Ripple followed suit and closed above their key resistance levels, hinting at a possible rally ahead.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.
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.