EUR/USD trapped below 1.09 as quiet Monday markets churn

Source Fxstreet
  • EUR/USD continued to drift near 1.0900 after a quiet start to the new trading week.
  • The Euro is poised for a rebound after paring back gains against the US Dollar.
  • Key data due later in the week, data-light sessions expected until then.

EUR/USD churned on Monday just below 1.0900 as the new trading week kicks things off on a notably light note. Meaningful data remains limited for the first half of the trading week, leaving Fiber traders to shuffle in place as investors await Wednesday’s key Purchasing Managers Index (PMI) figures for both the EU and the US.

Forex Today: Key US data prompt some caution

Monday and Tuesday are set to keep things roughly on-balance as markets await a kickstart to the week’s meaningful economic data calendar on Wednesday. On Tuesday, mid-tier US Existing Home Sales Change for June will be released. EUR/USD traders will be focusing on Wednesday’s double-header of Purchasing Managers Index (PMI) data prints. The EU’s Manufacturing and Services PMI for July are expected to slightly increase, with MoM Services PMI numbers projected to be at 53.0 compared to the previous month’s 52.8.

On Wednesday, the US will release its own PMI data. Forecasting models predict that July’s US Services PMI will decrease to 54.4 from the previous 55.3. Thursday will continue with high-impact US data trend, featuring annualized Gross Domestic Product (GDP) for the second quarter of 2024. The trading week will conclude with Friday’s US Personal Consumption Expenditure - Price Index (PCE) inflation, which will provide key US inflation data.

Euro PRICE This week

The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Australian Dollar.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   -0.06% -0.14% -0.31% 0.32% 0.69% 0.64% 0.20%
EUR 0.06%   -0.09% -0.29% 0.34% 0.79% 0.65% 0.20%
GBP 0.14% 0.09%   -0.30% 0.42% 0.89% 0.72% 0.27%
JPY 0.31% 0.29% 0.30%   0.67% 1.08% 0.92% 0.46%
CAD -0.32% -0.34% -0.42% -0.67%   0.46% 0.32% -0.12%
AUD -0.69% -0.79% -0.89% -1.08% -0.46%   -0.14% -0.60%
NZD -0.64% -0.65% -0.72% -0.92% -0.32% 0.14%   -0.41%
CHF -0.20% -0.20% -0.27% -0.46% 0.12% 0.60% 0.41%  

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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

EUR/USD technical outlook

EUR/USD traded tightly with near-term technical levels on Monday, cycling just north of the 200-hour Exponential Moving Average (EMA) at 1.0882. The Fiber has pulled back from recent highs set just shy of 1.0950 as Greenback bidding eases further back but the top end remains close by.

Daily candlesticks are poised for an extended backslide as price action slips back into the range of a rough descending channel, and a continued bearish reversal could see bids set up to challenge the 200-day EMA at 1.0795.

EUR/USD hourly chart

EUR/USD daily chart

Euro FAQs

The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
When Will Gold Rise Under the Pressure of High Oil Prices? On April 8, spot gold ( XAUUSD) at one point surged past $4,800 per ounce, hitting a peak of $4,857; however, it fell back to $4,698 on April 9, wiping out all gains in just 48 hours. Thi
Author  TradingKey
Yesterday 10: 19
On April 8, spot gold ( XAUUSD) at one point surged past $4,800 per ounce, hitting a peak of $4,857; however, it fell back to $4,698 on April 9, wiping out all gains in just 48 hours. Thi
placeholder
WTI holds steady above $92.00 as Strait of Hormuz remains closed; bulls seem hesitant West Texas Intermediate (WTI) – the benchmark US Crude Oil price – trades with a mild positive bias during the Asian session on Friday, though it lacks bullish conviction amid hopes of Iran ceasefire stabilizing.
Author  FXStreet
Yesterday 01: 35
West Texas Intermediate (WTI) – the benchmark US Crude Oil price – trades with a mild positive bias during the Asian session on Friday, though it lacks bullish conviction amid hopes of Iran ceasefire stabilizing.
placeholder
Geopolitical Premium Strikes Back. Hormuz Strait Reopening Faces Changes, Bitcoin Barely Holds 70,000 Psychological LevelMiddle East tensions escalate ahead of negotiations, causing Bitcoin to pull back after a surge, with $70,000 becoming the watershed between bulls and bears.On April 9, unexpected develop
Author  TradingKey
Apr 09, Thu
Middle East tensions escalate ahead of negotiations, causing Bitcoin to pull back after a surge, with $70,000 becoming the watershed between bulls and bears.On April 9, unexpected develop
placeholder
Strait of Hormuz Closes Again, When Will Global Energy Supply See Light Again?The outlook for navigation through the Strait of Hormuz remains clouded by uncertainty, as the newly reached ceasefire agreement has failed to bring stability to this global energy choke
Author  TradingKey
Apr 09, Thu
The outlook for navigation through the Strait of Hormuz remains clouded by uncertainty, as the newly reached ceasefire agreement has failed to bring stability to this global energy choke
placeholder
Gold edges lower below $4,750 amid fragile Middle East ceasefire Gold price (XAU/USD) trades in negative territory around $4,705 during the early Asian session on Thursday. The precious metal edges lower amid a temporary two-week ceasefire between the US and Iran.   
Author  FXStreet
Apr 09, Thu
Gold price (XAU/USD) trades in negative territory around $4,705 during the early Asian session on Thursday. The precious metal edges lower amid a temporary two-week ceasefire between the US and Iran.   
Related Instrument
goTop
quote