Browsing: EUR/USD Forecast

EUR/USD Forecast, Technical Analysis, Outlook ► preview of the main events that move Euro/Dollar during the week. Here is some general information. Scroll down for the latest EUR/USD forecast.

EUR/USD characteristics

Euro/dollar is the world’s most popular currency pair for both institutional and retail traders. The euro is the common currency of 19 European countries that vary quite a bit from each other. The key countries are Germany, France, Italy and Spain. The US dollar is the reserve currency of the world.

Germany’s exports and high trade surplus mean that funds are flowing into the euro area. When speculation is not rife, this influx pushes the common currency higher. However, the eurozone has its share of economic and political issues.

The euro debt crisis engulfed Greece, Portugal, Ireland, Italy, and Spain. While the worst may be behind us, it is always looming. Thanks to the leadership of the European Central Bank and President Mario Draghi, the project survived. His “whatever it takes” speech in July 2012″ was a turning point. The diverse countries are linked by a monetary union but not a fiscal one, and this remains the Achilles heel.

EUR//USD trading is often choppy, especially when it is confined to narrow ranges. When the pair is in trend, past technical lines, even those from 2003, are respected quite nicely.

EUR/USD recent moves

The euro-zone economies are growing at a robust pace in 2017. Unemployment is falling and even core inflation is finally rising. All this has led to optimism that sent the euro higher.

The European Central Bank is set to trim its bond-buying scheme (QE) in early 2018. Draghi tried to talk down the currency but to no avail. A weaker euro makes exports more attractive and pushes imported inflation higher. Reports about halving the volume to 30€ billion / month have circulated.

The victory of Emmanuel Macron in France unleashed the upside in the pair: the wave of populism has probably peaked. Nevertheless, politics remain problematic, especially with the fractured parliament in Germany. and this weighs on the euro.

In the US, hopes for fiscal stimulus faded early in the year, but are now on the rise again, with Trump’s tax plan. The Federal Reserve has maintained its plan for three rates hikes in 2017 despite lower US inflation.

Latest weekly EUR/USD forecast

EUR/USD drifted slightly higher in a week that saw mounting speculation about the next move by the ECB and ongoing tensions in Catalonia. Final inflation figures and a key German survey stand out. Here is an outlook for the highlights of this week and an updated technical analysis for EUR/USD.

The ECB may halve the QE program to 30 billion in 2018. The speculation mounts towards the October 26th decision. Any lower number boosts the euro. In Catalonia, President Puigdemont announced a “suspended independence” and his move was answered by an ultimatum from Spanish PM Rajoy. Catalonia is requested to deny it has declared independence or face a suspension of the autonomy. In the US, the data was quite good but the Fed has some doubts about December.

Updates:

EUR/USD daily graph with support and resistance lines on it. Click to enlarge:

  1. German WPI: Monday, 6:00. The Wholesale Price Index serves as another indicator for inflation. It rose by 0.3% in August and is expected to increase by 0.4% in September.
  2. Trade Balance: Monday, 9:00. The euro-zone enjoys trade surpluses thanks to German exports. A slightly disappointing surplus of 18.6 was recorded in July. A surplus of 20.3 billion is predicted now.
  3. CPI (final): Tuesday, 9:00. According to the initial figures for September, headline inflation picked up to 1.5% y/y but core inflation was unable to hold onto higher levels and slipped to 1.1%. The final numbers are expected to confirm the flash ones, but any change will be closely watched by the ECB. Any downgrade could result in a slower reduction of QE while an upgrade could result in a quicker pace.
  4. German ZEW Economic Sentiment: Tuesday, 9:00. This early, 300-strong German business survey beat expectations last month and jumped to 17 points. While there are political worries in Europe, Germany seems to be doing quite alright. Another rise to 20.3 is on the cards. The all-European measure stood at 31.7 points.
  5. Mario Draghi talks: Wednesday, 8:10. The President of the ECB will be speaking in Frankfurt, at the ECB conference. On his home turf, Draghi could provide a hint about the upcoming ECB meeting the following week.
  6. German PPI: Friday, 6:00. Producer prices advanced by 0.2% in Germany back in August. Prices at factory gates feed into consumer inflation. A small rise of 0.1% is on the cards.
  7. Current Account: Friday, 8:00. Similar to the narrower current account measure, the 19-country currency bloc has a significant surplus. In July, the surplus surprised with 25.1 billion. A wider surplus of 26.2 billion is predicted.

* All times are GMT

EUR/USD Technical Analysis

Euro/dollar continued moving higher after bouncing from the 1.1670 level (mentioned last week).

Technical lines from top to bottom:

1.2240 is a high line from 2014. The cycle high of 1.2090 looms above.

1.20 is the obvious round level and also worked as resistance in September. 1.1910 held the pair down back in August.

1.1830 capped the pair in August and in October while working as support in September.

1.1670 was a swing low in October.

It is followed by the round number of 1.15. 1.1445 is the June 2017 peak and immediate resistance.

I am bullish on EUR/USD

After the much-needed consolidation phase, the pair could resume its uptrend. Further talk and rumors about QE tapering could give a boost to the common currency.

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