- EUR/USD slumped back into the 1.0400 handle on Thursday.
- German data looms ahead on Friday, followed by key US inflation figures.
- Fiber traders wait to see if the Fed’s rate call this week was the right one.
EUR/USD shifted lower for a fourth consecutive trading day on Thursday, peaking near 1.0450 before softening to shed one-fifth of one percent on the day and ending just below the 1.0400 handle as the Euro’s near-term bull run draws to an end. A slate of German economic figures are due early Friday, followed by a key US inflation reading.
European Central Bank (ECB) President Christine Lagarde hit newswires during Thursday’s early US market session to soothe markets over the recent soft patch of European data, noting that a single month or quarter of souring data doesn’t necessarily mean a trend is being established. The ECB head may come to regret those remarks with German Retail Sales figures and Consumer Price Index (CPI) figures in the barrel for early Friday.
German Retail Sales are expected to hold steady at 2.5% YoY for the annualized period ending in December, while the MoM figure is expected to barely recover ground to 0.2% after November’s downside print of -0.6%. Headline German CPI inflation is likewise expected to hold steady at 2.6% for the year ended in December, holding frustratingly above the typical central bank targets of 2%.
US economic data was mixed on Thursday, leaving markets further confused. US Gross Domestic Product (GDP) growth for the fourth quarter of 2024 came in lower than expected, while weekly Initial Jobless Claims figures exceeded expectations and remained well within recent norms.
On Friday, US Personal Consumption Expenditure Price Index (PCEPI) inflation metrics will be released during the US market session. As the Federal Reserve’s (Fed) preferred method for measuring and tracking consumer-level inflation, this PCEPI report is likely to attract more attention than usual after the Fed boldly maintained interest rates earlier this week, despite President Trump’s strong objections.
EUR/USD price forecast
EUR/USD’s soft stance on Thursday marked another bearish rejection of the 50-day Exponential Moving Average (EMA) near 1.0450. The Fiber has soured for four consecutive sessions, leaving the pair on the low end of key technical levels as the latest bullish recover sputters.
The pair is still holding on the high side of the last major swing low into two-year bottoms south of 1.0200 reached earlier in the month. However, bulls are poised to fully run out of gas and drag the pair back into the 1.0300 region.
EUR/USD daily chart
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 toward 1.0500 after mixed US PMI data
EUR/USD rebounds toward 1.0500 in the American session on Friday after the data from the US showed that the business activity in the private sector expanded at a softer pace than anticipated in early February. The pair remains on track to end the week with little changed.

GBP/USD rises above 1.2650, looks to post weekly gains
GBP/USD regains its traction and trades above 1.2650 in the second half of the day on Friday. The data from the US showed that the S&P Global Services PMI dropped into the contraction territory below 50 in February, causing the US Dollar to lose strength and helping the pair edge higher.

Gold holds above $2,930 as US yields edge lower
Gold holds above $2,930 after correcting from the record-high it set above $2,950 on Thursday. Following the mixed PMI data from the US, the benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and allows XAU/USD to hold its ground.

Crypto exchange Bybit hacked for $1.4 billion worth of ETH
Following a security breach first spotted by crypto investigator ZachXBT, crypto exchange Bybit announced that it suffered a hack where an attacker compromised one of its ETH wallets.

Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK
We delve into the world of money market funds. Distinct dynamics are at play in the US, eurozone, and UK. In the US, repo rates are more attractive, and bills are expected to appreciate. It's also worth noting that the Fed might cut rates more than anticipated, similar to the UK. In the eurozone, unsecured rates remain elevated.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.