Home EUR/USD Forecast: Slow Recovery But Bearish Weather Ahead?
EUR/USD Forecast

EUR/USD Forecast: Slow Recovery But Bearish Weather Ahead?

The EUR/USD pair managed to recover some of its recent losses over the past 24 hours closing at the 1.1920 price mark. During the day it reached a high of 1.1969 although that was tempered by a gain in the USD. This was probably due to the after effects of FED Chairman Jerome Powell testimony to Congress which was considered as doveish.

Other factors include a sharp increase in services index for Germany and the EU. Data from the US on unemployment and GDP could also have an effect on the EUR/USD trading pair.


Markets Down But PMI’s and Services Index Up

Other factors in play were the slump in European indexes which closed mostly in the red. The US indexes were also down, mostly due to rather muted local data. June PMI’s however were above expectations according to Markit reports.

Germany’s manufacturing index rose to an impressive 64.9. The EU’s PMI was also up to 63, beating forecasts. The services sector also showed a considerable increase where it jumped from 2.8 in May to 58.1 in June
There was a different picture in the US with data showing, conversely, disappointing data. Services output was down considerably from 70.4 to 64.8 which was below expectations. On the other hand, the manufacturing index rose to 62.6 while New Home Sales fell by 5.9% as prices continued to rise substantially.

Events to Look Out For

Germany is expected to publish its IFO Business Climate for June. This is expected to slightly exceed the 100 mark at 100.6. The US is expected to report an increase of 2.7% on the May Durable Goods Orders Index.

Another important announcement for the US is the final reading of Q1 GDP. This is expected to be confirmed at 6.4%. The weekly unemployment claims are also to be published but not much difference is expected there.

EUR/USD Short-Term Technical Analysis

eurusd price chart 24 june 2021

EUR/USD is holding above the 20-day moving average (white line) for now, and has held support at the 0.786 Fib level, with the current price of 1.1926 hovering just above it.

The lack of resolve in maintaining action in the pitchfork midlines, with the pivot drawn at the price trough at around 1.18, may indicate a lack of buyer interest above the 0.618 Fib retracement level.

Traders are likely currently waiting for the US initial jobless figures before making their next move. The previous reading was 412k with the forecast expecting 380K. The data is released at 13:30 EST. A reading substantially above forecast could pressure EUR/USD lower.

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Gerald Fenech

Gerald Fenech

Freelance journalist and writer with over ten years experience in forex and fintech writing. Specializes in crypto and blockchain