- The EUR/USD consolidates the strong profits last week up to a maximum of almost three weeks.
- The technical configuration favors the bullies and supports the perspectives of additional profits.
- A weakness below the 1,0465 support could pave the way for deeper losses.
The EUR/USD pair struggles to capitalize on your profits recorded in the last four days and oscillates in a narrow negotiation range, just below the 1,0500 psychological brand during the Asian session on Monday. However, cash prices remain close to a maximum of almost three weeks reached Friday in the middle of a weaker US dollar.
From a technical perspective, acceptance above the Fibonacci recoil level of 38.2% of the fall from November to January and the positive oscillators in the daily chart favor the upward operators. Therefore, a subsequent force towards the proof of the confluence of 1,0545-1.0555, which includes the 50% recoil level and the exponential (EMA) mobile average of 100 days, seems like a different possibility.
Some monitoring purchases should pave the way for additional profits and help the EUR/USD to recover the 1,0600 brand. Cash prices could then rise to December 2024, around the 1.0630 zone, which is approaching the 61.8%Fibonacci level. A sustained strength will establish the stage for an extension of the recent recovery from a minimum of more than two years played in January.
On the other hand, the Fibonacci level of 38.2%, around the 1,0465 region, now seems to protect the immediate disadvantage. A convincing rupture below could drag the EUR/USD torque towards the round 1,0400 figure to the 1,0300s media (Fibonacci level of 23.6%). Not defending these support levels could change the bias in favor of the bearish operators and expose the 1200 round figure.
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/AUD (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.
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