- The EUR/USD recovers positive traction on Monday in the middle of a weakest USD.
- The technical configuration favors the bullies and supports the perspectives of new profits.
- Corrective landslides to the 1,1370 area could be seen as a purchase opportunity.
The EUR/USD torque attracts some purchases at lower levels at the beginning of a new week, reversing part of the fall on Friday and slowing the decline last week from the highest level since April 22. Cash prices are negotiated around the 1,1420 area, with an increase of more than 0.20% in the day, and seem ready to rise more in the middle of a US dollar (USD) in general weaker.
From a technical perspective, the EUR/USD torque once again showed resistance and bounced from the single mobile average (SMA) support of 100 hours on Friday. The posterior movement and the positive oscillators in the daily chart favor the bulls. Therefore, some monitoring force towards horizontal resistance of 1,1450-1.1455 en route to the maximum of last week, closer to the 1,1500 psychological brand, seems like a different possibility.
A sustained strength and acceptance above the latter will be seen as a new trigger for upward operators and will prepare the stage for an extension of the well -established upward trend of the EUR/USD pair observed during the last four weeks approximately. The impulse could extend even more towards the intermediate resistance of 1,1550 before cash prices aim to challenge the maximum of the year to date, around the 1,1575 region reached in April.
On the contrary, the minimum of Friday, around the area of ​​1,1370, could now protect the immediate fall, below which the EUR/USD torque could slide towards the intermediate support of 1,1340 before falling to levels below 1,1300. Some follow -up sale could drag cash prices towards the pivotal support of 1,1210 tested on May 29. The inability to defend the aforementioned support levels could cancel the positive perspective and change the trend in favor of the bearish operators.
1 hour graph of the EUR/USD
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.
