EUR/USD Price Forecast: Holds firm near 1.1450 but bearish signals persist below key EMA
- EUR/USD holds positive ground around 1.1450 in Monday’s Asian session.
- The pair keeps the bearish vibe below the key 100-day EMA, and the path of least resistance is to the downside with oversold RSI momentum.
- The first upside barrier to watch is 1.1510, and the initial support level emerges at 1.1415.
The EUR/USD pair recovers some lost ground to near 1.1450 during the Asian trading hours on Monday. Nonetheless, the potential upside for the major pair might be limited, as escalating conflict in the Middle East could boost safe-haven currencies such as the US Dollar (USD) against the Euro (EUR).
US President Donald Trump claimed over the weekend that “many countries” would send warships to the region before publicly urging a string of countries to do so. Trump further stated that the North Atlantic Treaty Organization (NATO) faces a “very bad” future if US allies fail to assist in opening up the Strait of Hormuz.
Traders brace for the US Federal Reserve (Fed) and the European Central Bank (ECB) interest rate decisions later this week. The Fed is widely expected to hold the interest rates at 3.50%–3.75% on Wednesday, but energy-driven inflation risks are dampening hopes for future rate cuts.
Swaps pricing indicates markets expect the ECB to tighten monetary policy faster than previously thought. The ECB is now seen hiking as soon as June, according to LSEG data.
Technical Analysis:
In the daily chart, the near-term bias of EUR/USD stays bearish as spot holds well below the 100-day exponential moving average, which has started to flatten after a prior topping phase, while price has broken beneath the lower Bollinger Band in recent sessions and now tracks along the downside of the envelope. The RSI hovers in oversold territory after sliding from mid-range readings, confirming strong downside momentum and suggesting sellers remain in control, even as the pair trades stretched below its 20-day Bollinger midpoint near 1.1700.
Initial resistance emerges at 1.1510, the latest recovery high, followed by stronger supply around 1.1620, where the 20-day Bollinger middle band and the 100-day EMA converge into a cap. On the downside, immediate support is located at 1.1415, the recent closing low, with a break exposing the next bearish target near 1.1360, derived from continuation along the current lower Bollinger Band trajectory. As long as EUR/USD remains capped below 1.1620, rallies are expected to attract selling interest, keeping focus on lower supports.
(The technical analysis of this story was written with the help of an AI tool.)
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.
추천 기사
