EUR/USD Price Forecast: Near-term bias turns negative on breakdown below 1.1655
- EUR/USD slides further to near 1.1655 as the US Dollar extends its rally due to multiple tailwinds.
- Both the US and China believe that the Strait of Hormuz should remain open.
- The Fed is unlikely to cut interest rates this year.
The EUR/USD pair extends its losing streak for the fourth trading day on Friday, trading 0.15% lower to near 1.1653 during the Asian trading session. The major currency pair faces selling pressure as the US Dollar (USD) extends its advance, following positive outcomes of the meeting between United States (US) President Donald Trump and Chinese leader Xi Jinping on Thursday.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.21% | 0.08% | 0.15% | 0.40% | 0.43% | 0.17% | |
| EUR | -0.16% | 0.05% | -0.07% | -0.02% | 0.24% | 0.31% | 0.02% | |
| GBP | -0.21% | -0.05% | -0.13% | -0.06% | 0.19% | 0.23% | -0.02% | |
| JPY | -0.08% | 0.07% | 0.13% | 0.07% | 0.30% | 0.36% | 0.09% | |
| CAD | -0.15% | 0.02% | 0.06% | -0.07% | 0.22% | 0.26% | 0.02% | |
| AUD | -0.40% | -0.24% | -0.19% | -0.30% | -0.22% | 0.06% | -0.22% | |
| NZD | -0.43% | -0.31% | -0.23% | -0.36% | -0.26% | -0.06% | -0.27% | |
| CHF | -0.17% | -0.02% | 0.02% | -0.09% | -0.02% | 0.22% | 0.27% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.15% higher to near 99.00, the highest level seen in two weeks.
On Thursday, the comments from both US President Trump and Chinese leader Xi indicated that trade relations between the two will improve hereon, and both stressed that the Strait of Hormuz should remain open.
Meanwhile, firm expectations that the Federal Reserve (Fed) will not deliver an interest rate cut this year are also strengthening the US Dollar.
In the Eurozone, a majority of economists in a Reuters poll have anticipated that the European Central Bank (ECB) will deliver an interest rate hike in the June policy meeting.
EUR/USD technical analysis
-1778814876737.png)
EUR/USD trades lower at around 1.1653 in the Asian trade. The pair holds a bearish near-term bias as spot holds beneath the 20-day Exponential Moving Average (EMA) at 1.1710. The confirmation of a Double Top formation breakdown after sliding below the April 30 low of 1.1655 warns of an extension of the ongoing decline.
The Relative Strength Index (RSI) around 44 leans lower, hinting that downside pressure is still in play rather than exhausted.
On the topside, initial resistance is located at the 20-day EMA near 1.1710, which needs to be reclaimed to ease immediate bearish pressure and open the way for a more sustained recovery towards 1.1800. Looking down, the pair could slide further towards the April 8 low at 1.1589 and the April 6 low of 1.1505.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Recommended Articles
