- The EUR/USD backed into the 1,1200 zone in the middle of a general weakness of the USD on Tuesday.
- The feeling of the market is increasing in the face of possible commercial agreements that will move the Trump administration away from their own tariff policies.
- The growth of the EU GDP, the US IPP and the feeling of the UOM consumer are the main remaining data of the week.
The EUR/USD rose on Tuesday, recovering most of the initial losses of the week. The torque is now testing the 1,1200 area again, thanks to a general market weakening in the dollar rather than a private bunder impulse that drives the flows of the euro market.
The market response to the US Consumer Price Index (CPI) was largely contained on Tuesday. Investors are still optimistic that the ongoing negotiations on trade agreements between the Trump administration and several parts will maintain a positive feeling, although all tariff concessions offered by the Trump team have been strictly temporary.
In the US, IPC inflation was reduced slightly in April, reaching a new minimum of three years for annualized general inflation. However, it is anticipated that the Trump administration approach to impose three -digit tariffs on key commercial partners will have repercussions from May, which leads market experts to wait for this to be the last solid report of the CPI for a while.
The harmonized index of consumer prices (HICP) of Germany will be published during the European market session on Wednesday, but non -preliminary figures will probably not generate much interest. Gross Domestic Product figures (GDP) Paneuropeo for the first quarter will also be published on Thursday, but the medium forecasts of the market expect the figures to be similar to those of the previous quarter.
On the American side, the US Price Price Index (IPP) inflation figures and the latest consumer’s feeling survey at the University of Michigan are scheduled for publication in the back of the negotiation week. The US IPP inflation data will be published on Thursday, followed by important figures on the feeling of the consumer on Friday.
EUR/USD forecast
The markets pressed hard to carry the EUR/USD back over the 1,1200 zone on Tuesday, being just below the key technical level. However, despite the limited bullish potential, the Fiber is again above the 50 -day exponential mobile average (EMA) about 1,1070. The bullish impulse is still absent in daily candles, but technical oscillators are going abruptly from over -sales territory, hinting at the potential for an upward extension.
EUR/USD daily graphics
Euro Faqs
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.
