- The hopes of a commercial agreement between the US and the Eurozone keep the euro on Tuesday.
- The technical image shows a mixed to negative trend from the maximum of last week.
- The resistances in 0.8640 and 0.8665 will probably maintain upward attempts today.
The Eurozone has eluded the first round of tariff cards by the US administration, and that is good news for the euro. Commercial conversations with the US.
This news has contributed to elevate to the euro this Tuesday and to reverse the fall of Monday, since the mixed commercial data of Germany and France have failed to improve the confidence in the common currency. From a broader perspective, the 4 -hour graph highlights a mixed corrective trend at bassist from the maximum of last week, at 0.8670.
Technical analysis: EUR/GBP is giving signs of a roof
The technical image in the four -hour graph is mixed. The RSI is again above 50, but the price action shows a descending trend since the maximum of July 2. Elliott’s wave analysis suggests that the torque has completed a 5 -wave bullish cycle and is now in an ABC correction.
The immediate support is at 0.8600 (minimum of July 7) before 0.8550 – 0.8560, where the minimum of July 1 meets the fibonacci setback of 38.2% of the June -July rally, and a significant technical floor for a bassist correction.
On the upward side, the maximums of July 4 and 7 in the 0.8640 area are closing the road to the maximum of July 2, in 0.8665. A confirmation above here cancels this vision and displaces the approach to the maximum of the year to date, at 0.8740.
EURO – FREQUENT QUESTIONS
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. 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 rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
