- EUR / USD stayed on a familiar territory on Monday nearly 1,1300 on Monday.
- A key rate of the key FED is looming during the market sessions in the middle of the week.
- European data take a rear seat this week while investors focus on hopes for lower rates.
EUR / USD swirled graphic paper near the familiar 1,1300 handle to launch a new week of negotiation. The fiber has been stuck in a restless consolidation phase while traders in euros have trouble launching a new push in both directions.
European data remains limited this week: it is unlikely that the data of the final purchase managers (PMI) index (PMI) is taken into account to produce surprises, and the European pan -European landmark retail figures which should early Wednesday should disappoint the markets, poison water supply and leave fiber traders to focus on the main federal reserve rate calls (Fed) this week.
The Fed should largely maintain stable interest rates for the moment, a decision likely to cause new criticisms of the Trump administration, which fiercely tries to cajolate the early rate reductions of the president of the Fed, Jerome Powell. Data on the workforce and inflation seem mainly balanced, but the erratic and unclear trade policies of the White House undermine its own chances of reduction in rates, because the Fed remains dedicated to its objective of controlling unemployment and price fluctuations.
Even if the Fed rate retention seems almost certain this week, the remarks of the President of the Fed Powell will bring additional meaning for investors after the Fed's announcement on Wednesday. Market players are still looking for indications for a change to a new rate reduction cycle, and merchants will be looking for any domination index of Fed officials.
EUR / USD price forecast
EUR / USD was captured in a short -term volatility trap between 1,1500 and 1,1200. The Euro Bulls seem to be entirely short of gas, but a large marketing sale left EUR / USD offers in the LURCH.
The fiber has pumped the brakes on the high side of a multi -year side version, but the next leg in both directions is faced with a rigid fundamental resistance. The euro is negotiated comfortably on the high side of the 200 -day exponential mobile average (EMA) nearly 1,0800, but recent summits north of 1,1500 also seem out of reach for the moment.
EUR / USD daily graphics
FAQ Euro
The euro is the currency of the 19 countries of the European Union which belong to the euro zone. It is the second most exchanged currency in the world behind the US dollar. In 2022, he represented 31% of all exchange transactions, with an average daily turnover of more than 2.2 billions of dollars per day. The EUR / USD is the most negotiated currency pair in the world, representing around 30%reduction on 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 of the euro zone. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the increase or decrease in interest rates. Relatively high interest rates – or higher rate waiting – will generally benefit the euro and vice versa. The ECB board of directors makes monetary policy decisions during meetings held eight times a year. The decisions are made by the chiefs of national banks in the euro zone and six permanent members, including the president of the ECB, Christine Lagarde.
Inflation data from the euro zone, measured by the harmonized consumer prices index (HICP), is an important econometric for the euro. If inflation increases more than expected, especially if the 2% objective of the ECB forces the ECB to increase interest rates to bring it closer. Relatively high interest rates compared to its counterparts will generally benefit the euro, as it makes the region more attractive as a place for global investors to park their money.
Data versions assess the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and PMI services, employment and surveys on consumer feelings can all influence the management of the single currency. A strong economy is good for the euro. Not only does it attract more foreign investments, but it can encourage the ECB to establish interest rates, which will directly strengthen the euro. Otherwise, if the economic data is low, the euro is likely to drop. Economic data for the four largest economies in the euro zone (Germany, France, Italy and Spain) are particularly important, because they represent 75% of the economy in the euro zone.
Another important version of data for the euro is the trade balance. This indicator measures the difference between what a country gains from its exports and what it spends in imports over a given period. If a country produces highly sought -after exports, its currency will gain in value only from the additional demand created from foreign buyers seeking to buy these goods. Consequently, a positive net trade balance reinforces a currency and vice versa for a negative balance.
