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EUR/USD


Philip Miller
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Hi Philip, thanks for asking the question. 

EUR/USD has been trading below the $1.08 handle for the entire day as the sellers regained control yesterday. The bulls failed to clear $1.09 yesterday which was punished by the bears who were supported by the Fed Chairman Jerome Powell, who ruled out negative interest rates. 

Euro didn’t get much from the ECB either after the central bank warned that the eurozone economy is likely to shrink “at a speed and magnitude that are unprecedented in peacetime”. The ECB expects the EU GDP to shrink at least 5%, while the worst-case scenario points toward a 12% decline.

“The latest economic indicators and survey results covering the period since the coronavirus spread to the euro area have shown an unprecedented decline, pointing to a significant contraction in euro area economic activity and to rapidly deteriorating labour markets,” it is said in the latest ECB’s Economic Bulletin.


As for the prediction, it will be interesting to see how much lower can EUR/USD go below $1.08. The March lows just above $1.07 may cap the further losses.
 

 

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Hello Philip
Amidst a broadening USD selloff, EUR/USD tried and failed in rising above the 1.1000 position during the past few days. Instead, the pair has reverted towards the center of 1.0800 to 1.1200 range it has held in the period since last summer.
Some excitement resting on the EUR being at a turning point has triggered some spot price action. Again, pressure for EUR/USD downside shield on the options market has receded, particularly in the last three-month period.
In the near term, two main drivers are likely to provide enhanced EUR support. First has been a French and German proposal for the creation of an EU Recovery Fund. Second, a rapidly rising sentiment within the Euro-Zone economy has it that the worst of the pandemic is over.
Most analysts have yet to be convinced the EUR is about to strengthen at sustainable levels, vide the USD as it did circa 2017. Although analysts agree that major downside risks for the EUR have declined, an upside capacity for EUR/USD needs to remain limited. The top range in May needs to rest within the 1.0800 to 1.1200 range.
So, until May 31, downside Euro risks have declined, although upside potential has limitations.
 

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Hey,

The EUR/USD pair is continuing its upward trajectory as investors respond to the strong services PMIs and thanks to increasing retail sales in the Eurozone. EUR/USD is currently hovering around 1.1852, somewhat lower than the July high of 1.1905.

Traders will closely monitor the pair’s reaction to the non-manufacturing PMI data from the United States. Some analysts predict that the PMI will slightly diminish from the previous 57.1 to 55.0. Investors are also expecting the pair’s reaction to the ADP nonfarm private payroll numbers.

As for its future outlook, analysts have contradictory feelings about the EUR/USD. Analysts at Danske Bank estimated that the pair will decline to 1.1200 over the next few months, while the median Bloomberg one-month estimation by analysts is 1.1570, still lower than its current value.

Looking at the daily chart, we can see that the pair has been in a strong upward trajectory. Its price is currently above the short and medium-term moving averages but the RSI is still in the overbought level. Thus, it looks like EUR/USD will keep rising, particularly if it breaks above the last month’s high of 1.1904.
 

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