- The EUR/USD remained in family territory about 1,1300 on Monday.
- An important decision of Fed rates is coming during the market sessions in the middle of the week.
- European data goes to the background this week while investors focus on the hopes of feat cuts.
The EUR/USD turned in the graph near the family area of ​​1,1300 to start a new week of operations. The Fiber has been caught in an irregular consolidation phase while the euro operators fight to start a new impulse in any direction.
European data are still limited this week: the final data of the Purchasing Management Index (PMI) that will be published this week will probably not produce surprises, and the retail sales figures at the paneuropeir Federal Reserve (Fed) this week.
It is widely anticipated that the Fed maintains the stable interest rates for now, a decision that will probably cause more criticisms of the Trump administration, which is trying fiercely to induce cutting cuts of anticipated rates of the president of the FED, Jerome Powell. Labor and inflationary data seem to be mostly balanced, but the erratic and unclear commercial policies of the White House undermine their own possibilities of rate cuts, since the Fed remains dedicated to its objective of controlling unemployment and price fluctuations.
Although the Fed decision to maintain rates seems almost safe this week, President Powell’s comments will be an additional importance for investors after the Fed announcement on Wednesday. Market participants are still looking for indications of a change towards a new cycle of rate cuts, and the operators will be attentive to any smooth track by the Fed officials.
EUR/USD price forecast
The EUR/USD has been caught in a short -term volatility trap between 1,1500 and 1,1200. The bulls of the euro seem to have completely exhausted their energy, but a generalized sale of the dollar has left the EUR/USD offers in a limbo.
The Fiber has stopped the tall side of a lateral movement of several years, but the next movement in any direction faces a strong fundamental resistance. The euro is negotiated comfortably on the high side of the 200 -day exponential mobile average (EMA), but the recent recent ones above 1,1500 seem equally out of reach for now.
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.
