- EUR/USD shed 0.25% and fell back into the 1.0300 handle on Wednesday.
- Despite the midweek downside push, Fiber is holding above two year lows for now.
- EU Retail Sales, German Industrial Production, and US Challenger Job Cuts on the docket.
EUR/USD fell back once again on Wednesday, dipping back into the 1.0300 handle as Fiber traders weigh mixed EU data while sitting in the shadow of Friday’s looming US Nonfarm Payrolls (NFP) jobs data dump.
European data broadly recovered early Wednesday, with German Retail Sales and pan-European Producer Price Index (PPI) figures both rising from previous prints, but most data printed with below-average caveats, especially EU PPI inflation which remains in contraction territory. Euro traders will be hoping for an upside swing in pan-EU Retail Sales figures for the year ended in December, due early Thursday, but not until after German Industrial Production figures kick off the European trading session.
A raft of speeches from Federal Reserve (Fed) policymakers await traders on Thursday, as well as Challenger Job Cuts for December, which will serve as the last punch of NFP preview data before the bumper labor print on Friday.
ADP Employment Change in December showed slower hiring at 122K compared to 140K expected and 146K in November. Wage data is at its slowest since mid-2021.
The Federal Reserve's latest Meeting Minutes indicated greater concern over President Trump's tariff plans than initially thought. Despite earlier reassurances from Fed speakers about immigration and trade policies' minimal impact, the minutes highlighted four discussion points on major US policy changes affecting central banking. Additionally, the Fed agreed it was time to slow rate cuts, stressing that policy uncertainty is driving expectations for fewer cuts in 2025 than previously anticipated.
EUR/USD price forecast
EUR/USD near-term battle with the 1.0300 handle leaves Fiber traders pushed firmly onto the backfoot as bidders struggle to keep price action north of multi-year lows. The pair has slumped consistently since kicking off a bearish trend near the end of September. EUR/USD fell 8.82% top-to-bottom, knocking into 26-month lows in the process.
A bullish turnaround is on the cards with bids testing into arguably oversold territory, but Euro bulls will need to first contend with the 50-day Exponential Moving Average (EMA), which is grinding down into the 1.0500 handle.
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 above 1.0300, markets await comments from Fed officials
EUR/USD gains traction and trades above 1.0300 on Thursday despite mixed German Industrial Production and Eurozone Retail Sales data. Retreating US bond yields limits the USD's gains and allows the pair to hold its ground as market focus shifts to Fedspeak.
GBP/USD rebounds from multi-month lows, trades above 1.2300
GBP/USD erases a portion of its daily gains and trades above 1.2300 after setting a 14-month-low below 1.2250. The pair recovers as the UK gilt yields correct lower after surging to multi-year highs on a two-day gilt selloff. Markets keep a close eye on comments from central bank officials.
Gold climbs to new multi-week high above $2,670
Gold extends its weekly recovery and trades at its highest level since mid-December above $2,670. The benchmark 10-year US Treasury bond yield corrects lower from the multi-month high it touched above 4.7% on Wednesday, helping XAU/USD stretch higher.
Bitcoin falls below $94,000 as over $568 million outflows from ETFs
Bitcoin continues to edge down, trading below the $94,000 level on Thursday after falling more than 5% this week. Bitcoin US spot Exchange Traded Funds recorded an outflow of over $568 million on Wednesday, showing signs of decreasing demand.
How to trade NFP, one of the most volatile events Premium
NFP is the acronym for Nonfarm Payrolls, arguably the most important economic data release in the world. The indicator, which provides a comprehensive snapshot of the health of the US labor market, is typically published on the first Friday of each month.
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.