EUR/USD Price Forecast: Struggles at 1.1600, dives below 100-day SMA
- EUR/USD shifts neutral after clearing six-month downtrend resistance.
- Flat bullish RSI suggests upside, but momentum is slowing.
- Daily close above 1.1600 exposes 1.1629 and 1.1700.
The shared currency clings to minimal gains versus the US Dollar on Monday, edging up by some 0.08% after reaching a month-and-a-half high at 1.1614, then reversing course and falling beneath 1.1600, poised to end the session near the low of the day (LOD) of 1.1561.
EUR/USD Price Forecast: Technical Outlook
After climbing above a six-month-old downslope resistance trendline, EUR/USD has shifted from a downward bias to neutral, consolidating around the 1.1500-1.1600 area. On the upside, it is capped by the 100-day Simple Moving Average (SMA) at 1.1568, which is the first resistance level. If breached, the next area is 1.1600 ahead of challenging the 200-day SMA at 1.1629. The next key resistance is at 1.1650, followed by 1.1700.
On the downside, the EUR/USD might shift back to downwards, if it drops below 1.1500. If cleared, the next stop is the 50-day SMA at 1.1466, which converges with the six-month-old previous resistance trendline, turned support. Once breached, the next stop is 1.1400.
From a momentum standpoint, further upside is seen. The Relative Strength Index (RSI) is bullish, though it has turned flattish.
Given the backdrop, the EUR/USD might be poised to retest 1.1600. Failure to close above that level on a daily basis opens the door to a false breakout and could exacerbate a pullback toward lower price targets.
EUR/USD Price Chart – Daily
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%).
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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.
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