- EUR/USD stabilized near 1.0400 on Thursday.
- Investors are riding a tepid wave with a notable lack of data.
- Friday’s global PMI release will close out an otherwise unremarkable week.
EUR/USD was flat on Thursday, hovering near the 1.0400 area as investors navigate a largely unremarkable week despite a strong start on Monday. The lack of meaningful economic data on the agenda is doing already lukewarm markets no favors, and political headlines are driving most of the existing thin trading volume.
President Donald Trump lashed out on a wide range of issues during his appearance at the WEF’s annual meeting in Switzerland, known colloquially as Davos, the city that hosts the forum each year. President Trump reminded everyone in attendance that he intended to “wipe out” the US budget deficit, while somehow convincing the US Congress to pass “the largest tax cut in US history.” United” at the same time. Donald Trump also promised to try to subvert the operational independence of the US Federal Reserve (Fed) by demanding lower interest rates.
EUR/USD traders will have to settle for focusing on Friday’s Purchasing Managers’ Index (PMI) numbers from both the EU and the US. EU and US for January are mixed this week. Services components are expected to decline, or in the case of the EU, remain flat, and manufacturing to recover, albeit slightly. PMI numbers generally have limited impact unless results are severely misaligned with forecasts, but respondent response rates tend to be low, and overall numbers should be taken with caution.
EUR/USD Price Forecast
EUR/USD bulls lost strength just below the 50-day EMA around 1.0460, missing the 1.0450 level and pushing bids towards the 1.0400 range. The recent bullish momentum has gradually eased, even after a 2.75% rise since last week’s drop to new two-year lows below 1.0200.
Although technical indicators have recently shifted to bullish signals after previously suggesting oversold conditions, maintaining sustained momentum remains a challenge. Traders looking for a long-term bullish correction should wait for price action to confirm a pattern of higher lows before looking for technical signals to enter the market.
EUR/USD Daily Chart
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 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 more than $2.2 trillion per day. EUR/USD is the most traded currency pair in the world, accounting for an estimated 30% of all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2 %).
The European Central Bank (ECB), headquartered in Frankfurt, Germany, is the reserve bank of the eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate 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 the expectation of higher rates) tend to benefit the euro and vice versa. The Governing Council of the ECB makes decisions on monetary policy at meetings held eight times a year. Decisions are made by the directors of the Eurozone’s national banks and six permanent members, including ECB President Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), are an important econometric indicator for the euro. If inflation rises more than expected, especially if it exceeds the ECB’s 2% target, it forces the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to their counterparts tend to benefit the euro, making the region more attractive as a place for global investors to park their money.
The published data measures the health of the economy and may have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer confidence surveys can 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 raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the Euro is likely to fall. The economic data for the four largest eurozone economies (Germany, France, Italy and Spain) are especially significant, as they represent 75% of the eurozone economy.
Another important data that is published about 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 during a given period. If a country produces highly in-demand export products, its currency will gain value simply from the additional demand created by foreign buyers seeking to purchase 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.