EUR/USD Price Forecast: Falls toward 1.1750 near nine-day EMA
- EUR/USD may find the initial barrier at the 12-week high of 1.1849.
- The 14-day Relative Strength Index of 56 indicates constructive upside momentum.
- The immediate support lies at the nine-day EMA of 1.1744.
EUR/USD extends its losses for the second successive day, trading around 1.1760 during the Asian hours on Tuesday. The daily chart technical analysis indicates an ongoing bullish bias as the pair is remaining within the ascending channel pattern.
The EUR/USD pair is holding above both the nine-period and 50-period Exponential Moving Averages (EMAs), keeping a mild bullish bias. The short-term EMA running above the longer one, together with a 14-day Relative Strength Index (RSI) hovering around 56, suggests that upside momentum remains constructive, even if not yet in overbought territory.
On the upside, the primary barrier lies at the 12-week high of 1.1849, reached on April 17. A break above this level would lead the pair to test the upper boundary of the ascending channel around 1.2020. Further advances above the channel would lead the pair to explore the region around 1.2082, the highest since June 2021, reached on January 27.
The EUR/USD pair may find immediate support at the nine-day EMA of 1.1744, followed by the lower ascending channel boundary around 1.1730 and the 50-day EMA of 1.1697. Further declines will put downward pressure on the pair to navigate the region around the nine-month low of 1.1411, recorded on March 13.
(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.
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