- The EUR/USD fell sharply on Monday, closing 1.4% lower after a brief test below 1.1000.
- A (temporary) setback of tariffs between the US and China promoted appetite for risk.
- The key inflation data of the US IPC is coming, with the EU GDP growth figures around the corner.
The EUR/USD took a strong step down Monday, starting the new negotiation week with a new fall below 1.1000 before a late recovery pushed the torque back to 1,1100. The Fiber still closed 1.4% lower in the day, and investors prepare for a new inflation data batch of the United States Consumer Price Index (IPC) that will be published on Tuesday.
Forex today: All attention focuses on US inflation data.
USA and China have jointly decided to pause the high three -digit tariffs during the initial commercial discussions of the weekend, giving markets a brief respite before the unusual calendar of “reciprocal” tariffs of the US are resumed in 90 days. The US IPC inflation report for April will be monitored closely on Tuesday. It is projected that IPC inflation general increases 0.3% month by month from the previous -0.1%, while anticipating that the inflation of the underlying IPC increases to 0.3% from 0.1%. Despite these monthly changes, both underlying and general inflation are expected to remain stable year -on -year.
US IPC inflation, EU GDP growth on the agenda this week
The final harmonized consumer price index (HICP) will be published on Wednesday, but important changes in non -preliminary data are not expected. The growth figures of the Gross Domestic Product (GDP) Pan-European are scheduled for Thursday, and will be the great impression for the operators of the euro this week. Markets generally expect that both the growth of intertrimestral and annualized GDPs remain stable in previous figures of 0.4% and 1.2%, respectively.
EUR/USD price forecast
The new bearish fall of the EUR/USD on Monday saw when trying below 1.1000 for the first time since the beginning of April. The torque is still negotiated above the 50 -day exponential mobile average (EMA) about 1,1070, but only by little.
The price momentum has been firmly bassist since the torque reached a peak above 1,1500 and failed to maintain the critical level. Daily candles have closed in bear trend more often than not during the last 14 consecutive negotiation sessions, or almost three weeks.
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.
