EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- Key Insight: EUR/USD hovers near its pivot, suggesting a neutral stance with cautious bias.
- Key Levels: Immediate resistance at $1.08382; immediate support at $1.07986.
- Outlook: Mildly bearish, with selling interest likely below $1.08223.
The EUR/USD pair is trading just below the pivot point of $1.08223, marking a cautious stance as it edges lower in today’s session. Immediate resistance is noted at $1.08382, with further resistance levels at $1.08568 and $1.08738.
The 50-period Exponential Moving Average (EMA) at $1.08101 aligns closely with the current price, suggesting a tentative neutral bias. The Relative Strength Index (RSI) sits at 52, indicating balanced momentum without strong overbought or oversold signals.
Should the pair sustain a drop below $1.08223, it may attract further selling interest, potentially pushing it toward immediate support at $1.07986. A break beneath this level could open doors to additional downside toward $1.07858 and $1.07686.
Traders may consider short positions below $1.08223, targeting $1.07864, while setting a stop loss around $1.08414 to guard against unexpected volatility. Watch for price action near the pivot for early indications of market direction.
EUR/USD trades near its pivot, with potential for further downside if support levels are broken.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08223
Take Profit – 1.07864
Stop Loss – 1.08414
Risk to Reward – 1: 1.8
Profit & Loss Per Standard Lot = +$359/ -$191
Profit & Loss Per Mini Lot = +$35/ -$19
EUR/USD Price Analysis – Oct 30, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair maintained its upward trend, remaining well bid around 1.0832 and reaching an intra-day high of 1.0859.
This bullish rally can be attributed to positive Eurozone growth data, which indicated that the economy surprisingly grew in the third quarter after contracting in the April-June period.
Moreover, gains in the EUR/USD pair accelerated as the bullish rally in the US dollar appeared to have slowed and faced bearish pressure following weak JOLTS Job Openings data for September.
EUR/USD Rises on Positive Eurozone GDP Data and Lower Rate Cut Expectations
On the EUR front, the shared currency gained strong bullish traction, with the EUR/USD rising strongly near the 1.0850 level. This surge is mainly due to positive Gross Domestic Product (GDP) data showing that the Eurozone economy grew unexpectedly in the third quarter after contracting earlier in the year.
In the meantime, the German economy expanded by 0.2%, surprising economists who had predicted a 0.1% decline. However, the Eurozone overall grew by 0.4% in the three months ending in September, following a 0.2% growth in the previous quarter.
Meanwhile, the bloc's GDP rose at an annual rate of 0.9% in Q3, compared to 0.6% in Q2 and the expected 0.8%. Year-on-year, German GDP contracted at a slower rate of 0.3% after flat growth in Q2. Additionally, the preliminary Harmonized Index of Consumer Prices (HICP) data for Germany showed higher-than-expected inflation.
These positive developments have reduced expectations for a significant interest rate cut by the European Central Bank (ECB) in December, with the likelihood of a 50 basis point cut now dropping to 22% from 45%. However, concerns about the Eurozone's economic outlook remain among investors.
EUR/USD Boosted by Bearish US Dollar and Weak Job Data
Another factor that has been boosting the EUR/USD pair is the bearish US dollar, which has lost its momentum following weak JOLTS Job Openings data for September, raising concerns about the labor market.
The data revealed that job openings dropped to 7.443 million, below the expected 7.99 million and down from the previous 7.861 million. This decline in job openings suggests a slowdown in labor demand and supports expectations that the Federal Reserve may keep interest rates low for the rest of the year.
Moving on, investors are looking ahead to key reports like the ADP Employment Change and the flash US Q3 GDP data, which will be released during the North American session.
Economists predict the private sector added 115,000 new jobs in October, down from 143,000 in September. Furthermore, the US economy is expected to grow at a steady annualized rate of 3.0%.
EUR/USD – Technical Analysis
The EUR/USD pair is trading just below the pivot point of $1.08223, marking a cautious stance as it edges lower in today’s session. Immediate resistance is noted at $1.08382, with further resistance levels at $1.08568 and $1.08738.
The 50-period Exponential Moving Average (EMA) at $1.08101 aligns closely with the current price, suggesting a tentative neutral bias. The Relative Strength Index (RSI) sits at 52, indicating balanced momentum without strong overbought or oversold signals.
Should the pair sustain a drop below $1.08223, it may attract further selling interest, potentially pushing it toward immediate support at $1.07986. A break beneath this level could open doors to additional downside toward $1.07858 and $1.07686.
Traders may consider short positions below $1.08223, targeting $1.07864, while setting a stop loss around $1.08414 to guard against unexpected volatility. Watch for price action near the pivot for early indications of market direction.
EUR/USD trades near its pivot, with potential for further downside if support levels are broken.
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EUR/USD Price Analysis – Oct 28, 2024
Daily Price Outlook
The EUR/USD currency pair continued its upward trend, attracting strong bids around the 1.0820 level as the US dollar lost traction and dropped from an almost three-month high. However, the outlook for the US dollar remains strong amid risk-off market sentiment ahead of the US presidential election.
Meanwhile, the Euro is trading sideways ahead of a data-packed week, during which traders will receive key economic growth and inflation figures for both the US and the Eurozone.
Economic Outlook for the Eurozone and Its Impact on the EUR/USD Pair
On the EUR front, the shared currency is largely moving sideways as traders anticipate a busy week of economic data, including growth and inflation figures for both the United States and the Eurozone. These economic indicators are important because they often influence interest rate decisions.
In the Eurozone, investors are particularly focused on economic growth data, as inflation is expected to stay close to the European Central Bank's (ECB) target of 2%. Economists project the Eurozone economy will grow by 0.8% year-on-year, an increase from the 0.6% seen in the second quarter, with growth expected to hold steady at 0.2% compared to the previous quarter.
Germany, the largest economy in the Eurozone, is anticipated to see a decline of 0.3% in Q3, which could weigh on overall growth. In light of this, ECB policymaker and Bundesbank President Joachim Nagel highlighted the importance of implementing a growth package recently announced by the German government to support the economy.
He noted that while a significant 50-basis points interest rate cut might be considered in December, decisions will depend on several factors, including the US presidential election results and inflation data.
Therefore, the anticipated economic growth and inflation data in the Eurozone could lead to fluctuations in the EUR/USD pair. If growth exceeds expectations, it may strengthen the Euro, while weak German performance could weigh on the Euro, leading to volatility.
Impact of US Economic Outlook on the EUR/USD Pair
On the US front, the US dollar has dropped and showed mild bearish trend. Despite this decline, the outlook for the US Dollar remains strong as investors adopt a risk-averse stance with the US presidential election just a week away. Central bankers discussed the potential implications of a former President Donald Trump victory over current Vice President Kamala Harris during panels at the recent IMF meeting.
Many traders view this scenario positively for the US Dollar, as Trump has promised to increase tariffs by 10% on all countries except China, which would face even steeper tariffs of 60%.
In addition to election-related uncertainties, the US Dollar's direction will be influenced by a series of economic data releases this week. Market participants are particularly focused on the Job Openings and Labor Turnover Survey (JOLTS) and the Nonfarm Payrolls (NFP) data, as these will provide insights into job demand in the economy.
Plus, Q3 GDP data will help gauge the current health of the US economy, further influencing the dollar's value as traders seek cues for future market movements.
Therefore, the US Dollar's mild bearish trend and upcoming economic data releases may create volatility in the EUR/USD pair. If US data shows strong job demand or GDP growth, it could strengthen the dollar, potentially leading to a decline in the Euro's value.
EUR/USD – Technical Analysis
EUR/USD is experiencing bearish momentum, with the currency pair trading below its 50-day Exponential Moving Average (EMA) of $1.08085. The pivot level for today is at $1.07964, just above the current price. This positioning suggests that the pair is under selling pressure, with immediate resistance located at $1.08152, followed by stronger resistance at $1.08388 and $1.08655.
The Relative Strength Index (RSI) currently stands at 34, reflecting bearish momentum and indicating that the pair may still have room to the downside before reaching oversold conditions. A sustained move below the pivot and the 50 EMA could expose EUR/USD to immediate support at $1.07615, with additional downside targets at $1.07139 if selling pressure intensifies.
For traders considering short positions, an entry below $1.07957 could present a favorable opportunity, with a target set at $1.07613. A stop-loss placed slightly above the immediate resistance level at $1.08148 would help limit risk, ensuring a balanced risk-to-reward setup.
Overall, as the EUR/USD pair trades below its pivot and the 50 EMA, the outlook remains bearish. Market participants should monitor the pair’s reaction to the support at $1.07615 closely, as a break could accelerate further downside movement.
Conclusion: EUR/USD’s current positioning below the pivot and 50 EMA signals continued bearishness. Traders may consider short entries below $1.07957, targeting $1.07613, with a protective stop-loss near $1.08148.
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EUR/USD Price Analysis – Oct 25, 2024
Daily Price Outlook
During the European trading session, the EUR/USD currency pair is steady around 1.0830, continuing its recovery from Thursday. This rise is mainly due to a drop in the US Dollar. However, the Euro's gains may not last as the latest preliminary PMI report shows that economic activity in the Eurozone is still struggling, with the flash Composite PMI falling to 49.7 in October.
Meanwhile, the manufacturing sector has been contracting for 28 months, remaining below the key 50 mark. Although the service sector saw some growth, it was slower than expected. This ongoing decline in business activity raises concerns about the Eurozone's economic growth, leaving many unsure about the future.
Eurozone Economic Decline and ECB Rate Cut Speculation Weigh on Euro, Impacting EUR/USD Pair
As we mentioned, the gains in the shared currency might be short-lived as the latest PMI report indicates that the Eurozone's economic activity continues to decline. The flash Composite PMI dropped to 49.7 in October, showing that the manufacturing sector has been shrinking for 28 months, remaining below the crucial 50 mark that signals growth.
Although the service sector saw some unexpected growth, it was slower than hoped. This ongoing decline in business activity raises concerns about the Eurozone's economic future. Furthermore, there is increasing speculation that the European Central Bank (ECB) may implement a larger-than-usual interest rate cut in its December meeting, which could further weigh down the Euro.
This year, the ECB has already lowered its Deposit Facility Rate three times by 25 basis points, bringing it to 3.25%. Market expectations are now leaning towards a potential 50 basis point cut in December, fueled by comments from some ECB policymakers who expressed concerns about inflation staying below the bank's 2% target.
Mario Centeno, the Governor of the Bank of Portugal and an ECB policymaker noted that a 50 basis point cut is a possibility and warned of growing risks to economic growth.
Meanwhile, data released on Friday showed that the German IFO Business Climate, Current Assessment, and Expectations for October were better than expected. However, improving sentiment may not lead to a significant economic revival due to overall weak business activity.
Therefore, the ongoing decline in Eurozone economic activity and speculation of a larger interest rate cut by the ECB could weaken the Euro, putting downward pressure on the EUR/USD pair. This uncertainty may lead to increased volatility and potential losses for Euro traders.
US Dollar Recovery Supported by Fed Expectations and Economic Data, Impacting EUR/USD Pair
On the US front, the broad-based US Dollar is seeing a recovery, supported by several factors, including growing expectations that the Federal Reserve (Fed) will take a gradual approach to cutting interest rates and increasing hopes that former President Donald Trump could win the upcoming presidential election against Vice President Kamala Harris.
Investor confidence in the Fed's cautious policy is bolstered by positive economic data, including strong Nonfarm Payrolls (NFP) and Retail Sales figures for September, as well as better-than-expected flash S&P Global PMI data for October, indicating sustainable economic growth.
Moving ahead, attention will turn to the US Durable Goods Orders data for September, set to be released at 12:30 GMT, which is expected to show a decline of 1% after remaining unchanged in August.
EUR/USD – Technical Analysis
EUR/USD is trading at $1.08213, down by 0.06% as the currency pair struggles to maintain momentum near the $1.08465 pivot point. Immediate support stands at $1.08291, a level crucial for short-term sentiment.
Should EUR/USD breach this level, it could extend the bearish move toward the immediate support target of $1.07712, with a further downside likely to test $1.07486 if selling pressure intensifies.
On the upside, EUR/USD will face strong resistance at $1.08692, a level reinforced by the 50-day EMA, which is currently sitting at $1.08092. This EMA acts as a significant pivot, potentially limiting any bullish moves unless there is a sustained break above it.
Additional resistance can be found at $1.08880, providing a key barrier for bullish sentiment should the pair reverse.
The RSI reading of 59 signals modestly bullish momentum, suggesting the pair may be on the verge of testing higher resistance levels. However, the bearish pressure currently weighs heavier as the price action remains below the pivotal $1.08465 level.
Traders may want to consider a short position below $1.08288, with a take-profit target of $1.07976 and a stop-loss at $1.08465.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD faces key resistance at $1.08692, with a breakout needed for a bullish shift.
- Breaching $1.08291 could pave the way for a move down to $1.07712.
- RSI at 59 shows moderate bullish momentum, but resistance caps further gains.
EUR/USD is trading at $1.08213, down by 0.06% as the currency pair struggles to maintain momentum near the $1.08465 pivot point. Immediate support stands at $1.08291, a level crucial for short-term sentiment. Should EUR/USD breach this level, it could extend the bearish move toward the immediate support target of $1.07712, with a further downside likely to test $1.07486 if selling pressure intensifies.
On the upside, EUR/USD will face strong resistance at $1.08692, a level reinforced by the 50-day EMA, which is currently sitting at $1.08092. This EMA acts as a significant pivot, potentially limiting any bullish moves unless there is a sustained break above it. Additional resistance can be found at $1.08880, providing a key barrier for bullish sentiment should the pair reverse.
The RSI reading of 59 signals modestly bullish momentum, suggesting the pair may be on the verge of testing higher resistance levels. However, the bearish pressure currently weighs heavier as the price action remains below the pivotal $1.08465 level. Traders may want to consider a short position below $1.08288, with a take-profit target of $1.07976 and a stop-loss at $1.08465.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08288
Take Profit – 1.07976
Stop Loss – 1.08465
Risk to Reward – 1: 1.7
Profit & Loss Per Standard Lot = +$312/ -$177
Profit & Loss Per Mini Lot = +$31/ -$17
EUR/USD Price Analysis – Oct 23, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair failed to stop its downward trend and remains under pressure due to a faster-than-expected decline in inflation and increasing concerns over a potential downturn in the Eurozone economy, leading to speculation about further interest rate cuts by the European Central Bank (ECB).
Concurrently, the US dollar has strengthened, driven by various factors, including political uncertainty ahead of the upcoming US presidential election and expectations that the Federal Reserve’s (Fed) policy-easing cycle will proceed more gradually than anticipated. Investors will be particularly focused on the Fed’s Beige Book, set to be released on Wednesday at 18:00 GMT, along with speeches from several Fed and ECB members, including President Lagarde.
EUR Under Pressure as Inflation Declines and ECB Rate Cut Speculation Grows
On the EUR front, the outlook for the Euro (EUR) has worsened due to a faster-than-expected decline in inflation and rising concerns about a potential downturn in the Eurozone economy. This situation has sparked speculation about more interest rate cuts by the European Central Bank (ECB), which has already lowered its Deposit Facility Rate three times this year. Many traders expect another cut in December, prompting discussions about what level of borrowing rates would effectively control inflation while also encouraging economic growth.
Recently, some ECB officials have debated whether to lower interest rates below the so-called neutral rate, which is estimated to be around 2% to 2.25%. Lithuanian central bank governor Gediminas Šimkus highlighted concerns about inflation potentially staying too low, suggesting that if disinflation continues, rates may drop below natural levels.
Meanwhile, ECB President Christine Lagarde expressed confidence that inflation would return to the bank’s target of 2% by 2025, earlier than expected. She noted that while the direction of monetary policy is clear, the pace of future interest rate cuts will depend on incoming economic data.
Therefore, the worsening outlook for the Euro and expectations of further ECB rate cuts are likely to keep the EUR/USD pair under pressure. A weaker Euro combined with a stronger US dollar could lead to continued declines in the EUR/USD exchange rate.
US Dollar Strength Pressures EUR/USD Amid Political Uncertainty and Fed Expectations
On the US front, the broad-based US dollar (USD) is gaining strength, pushing the EUR/USD pair down to near 1.0780 level. However, this strength in the dollar is fueled by political uncertainty ahead of the upcoming US presidential election and expectations that the Federal Reserve (Fed) will adopt a more gradual approach to any policy easing than previously thought.
Market sentiment has shifted due to increasing bets that former President Donald Trump could win the election, scheduled in less than two weeks. While recent polls show Vice President Kamala Harris with a slight lead, a Trump victory could lead to higher tariffs and lower taxes, potentially pushing the Fed to adopt a more restrictive policy stance.
Currently, markets anticipate two 25 basis point interest rate cuts from the Fed in November and December. However, analysts suggest that the Fed is unlikely to implement another large rate cut like the one in September, especially since recent Nonfarm Payrolls (NFP) data indicates that labor demand remains strong. Investors are closely watching the Fed’s Beige Book release at 18:00 GMT, along with speeches from Fed and ECB officials, including President Lagarde.
Therefore, the strengthening US dollar, driven by political uncertainty and expectations of gradual Fed policy easing, is likely to continue putting downward pressure on the EUR/USD pair.
EUR/USD – Technical Analysis
From a technical perspective, EUR/USD is trading just below its pivot point of $1.08117, signaling indecision in the market and the potential for a breakout in either direction.
Immediate resistance is found at $1.08309, followed by $1.08475, and a stronger level at $1.08698. A breach of these resistance levels may trigger a broader upward move, but current momentum remains subdued.
On the downside, immediate support sits at $1.07920, with additional levels at $1.07712 and $1.07486. A break below $1.07920 would likely signal renewed selling pressure, pushing the pair toward these lower support levels.
The Relative Strength Index (RSI) is at 36, indicating mild bearish momentum, as EUR/USD remains in a consolidative phase. The 50-day Exponential Moving Average (EMA), currently at $1.08344, suggests that prices are trading below a critical threshold, reinforcing the short-term bearish outlook.
For traders, a short position could be considered if EUR/USD drops below $1.08179, with a target at $1.07716 and a stop-loss at $1.08478 to manage upside risks.
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EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD pivot point at $1.08117 signals indecision; short-term breakouts possible.
- Immediate resistance is at $1.08309; a push above this level could lead to $1.08475.
- RSI at 36 and prices below the 50-day EMA suggest mild bearish momentum.
From a technical perspective, EUR/USD is trading just below its pivot point of $1.08117, signaling indecision in the market and the potential for a breakout in either direction.
Immediate resistance is found at $1.08309, followed by $1.08475, and a stronger level at $1.08698. A breach of these resistance levels may trigger a broader upward move, but current momentum remains subdued.
On the downside, immediate support sits at $1.07920, with additional levels at $1.07712 and $1.07486. A break below $1.07920 would likely signal renewed selling pressure, pushing the pair toward these lower support levels.
The Relative Strength Index (RSI) is at 36, indicating mild bearish momentum, as EUR/USD remains in a consolidative phase. The 50-day Exponential Moving Average (EMA), currently at $1.08344, suggests that prices are trading below a critical threshold, reinforcing the short-term bearish outlook.
For traders, a short position could be considered if EUR/USD drops below $1.08179, with a target at $1.07716 and a stop-loss at $1.08478 to manage upside risks.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08179
Take Profit – 1.07716
Stop Loss – 1.08478
Risk to Reward – 1: 1.5
Profit & Loss Per Standard Lot = +$463/ -$299
Profit & Loss Per Mini Lot = +$46/ -$29
EUR/USD Price Analysis and Trade Forecast: Daily Trading Signal
Daily Price Outlook
- EUR/USD faces resistance at $1.0869, indicating potential downward pressure in the near term.
- Key support at $1.0835 suggests cautious buying interest around this level.
- RSI at 45.13 indicates neutral momentum, with potential downside if resistance holds firm.
EUR/USD is currently trading around $1.0861, reflecting a slight downward trend of 0.04%.
On the 2-hour chart, EUR/USD faces a key resistance level around $1.0869, corresponding to the 50-period Exponential Moving Average (EMA), which continues to act as a barrier for upward momentum. Recent trading sessions indicate a slight recovery attempt in EUR/USD, bouncing off from its immediate support at $1.0835. However, price action remains constrained below a descending trendline, suggesting ongoing selling pressure.
The Relative Strength Index (RSI) at 45.13 reflects neutral conditions, with slight bearish momentum. This signals potential room for further decline if selling pressure persists. Any failure to clear the immediate resistance could lead to renewed downward movement.
If EUR/USD breaks below $1.0868, it would face the next support level at $1.0813, followed by a critical base at $1.0794. On the upside, clearing the immediate resistance would open the door to $1.0894, followed by another key hurdle at $1.0916.
Conclusion:
If EUR/USD fails to surpass the $1.0869 resistance level, traders may consider selling below $1.0868, targeting $1.0813 as the next key support. However, a stop-loss should be placed above $1.0894 to manage risk.
EUR/USD - Trade Ideas
Entry Price – Sell Below 1.08677
Take Profit – 1.08137
Stop Loss – 1.08942
Risk to Reward – 1: 2
Profit & Loss Per Standard Lot = +$540/ -$265
Profit & Loss Per Mini Lot = +$54/ -$26
EUR/USD Price Analysis – Oct 21, 2024
Daily Price Outlook
During the European trading session, the EUR/USD pair is struggling to maintain its gains from the previous week and turned bearish on Monday, trading around the 1.0857 level and reaching an intra-day low of 1.0846. However, this downward trend is likely to continue, driven by the expectation that the US dollar will strengthen as modest rate cuts by the Federal Reserve (Fed) support higher US Treasury yields.
Moreover, the declines in the pair will likely accelerate as investors anticipate further interest rate easing by the European Central Bank (ECB). Market participants will closely monitor the upcoming two-day speech by ECB President Christine Lagarde, starting Tuesday.
Bearish Outlook for EUR/USD Amid ECB Rate Cut Expectations
As we mentioned above, the EUR/USD pair could face further selling pressure as investors think the European Central Bank (ECB) will cut interest rates again. The Eurozone’s economic growth is slowing, and inflation is below the ECB’s target of 2%. Many believe the bank will lower borrowing rates in December. Meanwhile, Estonian central bank Governor Madis Müller mentioned that weak economic growth could lead to lower inflation. The ECB’s recent survey also lowered next year's inflation forecast to 1.9%, down from 2%.
Moreover, Gediminas Šimkus, a member of the ECB Governing Council, shared a cautious view on interest rates. He said that if disinflation continues, rates might go below what’s considered normal. Investors will be paying close attention to ECB President Christine Lagarde’s two-day speech starting Tuesday. After the recent 25 basis point rate cut, Lagarde didn’t provide a clear plan for future rates, saying that decisions will depend on new economic data.
Therefore, the expectation of further interest rate cuts by the ECB, combined with slowing economic growth and lower inflation forecasts, is likely to weaken the EUR/USD pair.
US Dollar Strengthens Amid Rate Cut Expectations and Upcoming Elections
On the US front, the US dollar maintained its upward trend and recently reached an 11-week high near 104.00. Traders are feeling positive about the dollar's future, believing the Federal Reserve (Fed) will slowly lower interest rates. Data from the CME FedWatch tool shows that the market expects the Fed to cut rates by a total of 50 basis points this year, with 25 basis points likely in both November and December.
Meanwhile, the expectations for a slower rate-cutting approach from the Fed have grown after strong US economic data for September. Investors will be looking closely at the preliminary S&P Global Purchasing Managers’ Index (PMI) data for October, set to be released on Thursday.
Moreover, the US dollar could see some ups and downs as the presidential elections get closer. Recent polls indicate that Democratic candidate and current Vice President Kamala Harris is ahead of Republican nominee and former President Donald Trump.
EUR/USD – Technical Analysis
EUR/USD is currently trading around $1.0861, reflecting a slight downward trend of 0.04%.
On the 2-hour chart, EUR/USD faces a key resistance level around $1.0869, corresponding to the 50-period Exponential Moving Average (EMA), which continues to act as a barrier for upward momentum. Recent trading sessions indicate a slight recovery attempt in EUR/USD, bouncing off from its immediate support at $1.0835. However, price action remains constrained below a descending trendline, suggesting ongoing selling pressure.
The Relative Strength Index (RSI) at 45.13 reflects neutral conditions, with slight bearish momentum. This signals potential room for further decline if selling pressure persists. Any failure to clear the immediate resistance could lead to renewed downward movement.
If EUR/USD breaks below $1.0868, it would face the next support level at $1.0813, followed by a critical base at $1.0794. On the upside, clearing the immediate resistance would open the door to $1.0894, followed by another key hurdle at $1.0916.
Conclusion:
If EUR/USD fails to surpass the $1.0869 resistance level, traders may consider selling below $1.0868, targeting $1.0813 as the next key support. However, a stop-loss should be placed above $1.0894 to manage risk.
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EUR/USD Price Analysis – Oct 18, 2024
Daily Price Outlook
The EUR/USD currency pair managed to halt its downward trend and gained positive traction on Friday, recovering from a four-day losing streak to trade around the 1.0846 level, even reaching an intra-day high of 1.0849. The shared currency is working to maintain its footing as the recent rally in the US Dollar (USD) seems to have paused. The US Dollar Index (DXY), which measures the Greenback's value against six major currencies, is struggling to push above the immediate resistance level of 103.90.
However, the overall outlook for the EUR/USD remains bearish, with expectations of further interest rate cuts from the European Central Bank (ECB) likely to put additional selling pressure on the Euro (EUR). As market participants monitor these developments, the currency pair may continue to experience volatility in the days ahead.
US Dollar Weakens Amid Positive Economic Data and Political Uncertainty, Providing Opportunity for EUR/USD Recovery
On the US front, the broad-based US dollar is losing its traction, but its outlook remains strong after Thursday’s positive economic data showed the country’s resilience. Retail sales, a key indicator of consumer spending, increased by 0.4% in September, surpassing expectations. Meanwhile, initial jobless claims for the week ending October 11 fell to 241,000, lower than the anticipated 260,000, suggesting a stable job market.
In recent weeks, the US dollar has outperformed its major peers as traders have scaled back expectations for a larger-than-usual interest rate cut of 50 basis points by the Federal Reserve (Fed) in November. Strong economic data from September has eased fears of a slowdown, leading traders to anticipate more gradual rate cuts instead. The CME FedWatch tool indicates that traders are now pricing in two rate cuts of 25 basis points in November and December, potentially lowering interest rates to between 4.25% and 4.50% by the end of the year.
Looking ahead, investors are paying close attention to market expectations surrounding the upcoming US presidential elections. Currently, there is a tight race between Donald Trump and Kamala Harris, with Harris leading by 2.4 percentage points, according to FiveThirtyEight’s daily election poll tracker. This political landscape may influence market sentiment in the coming months.
EUR/USD Pair Faces Bearish Outlook Amid ECB Rate Cuts and Political Concerns
On the EUR front, the EUR/USD pair has seen a mild recovery on Friday after hitting a fresh 10-week low near 1.0800 on Thursday. Despite this slight rebound, the overall outlook for the currency pair remains bearish. The Euro (EUR) could face additional selling pressure as expectations grow for further interest rate cuts from the European Central Bank (ECB). Recently, the ECB cut its Deposit Facility Rate by 25 basis points to 3.25%, marking the second consecutive rate reduction and the third this year.
The ECB's recent actions reflect growing concerns about reviving economic growth, with officials expressing confidence that inflation is under control. In a press conference following the rate decision, ECB President Christine Lagarde did not provide clear guidance on potential interest rate moves in December. However, market participants are anticipating another 25-basis point cut at the last meeting of the year, which could further impact the Euro’s value.
EUR/USD – Technical Analysis
The EUR/USD pair is trading slightly higher today, up 0.11% at $1.08375. The market is hovering below the key pivot point at $1.0848, which serves as a critical level for short-term direction. Immediate resistance is seen at $1.0868, followed by higher resistance levels at $1.0892 and $1.0916. A break above these levels could signal further bullish momentum for the euro against the dollar, with buyers targeting the next resistance zones.
On the downside, immediate support is at $1.0811, with further support levels at $1.0794 and $1.0779. A sustained move below these support areas could push EUR/USD into a deeper correction, where a more bearish outlook would prevail.
The 50-day Exponential Moving Average (EMA) at $1.0877 is acting as a resistance level, keeping the euro in check. Meanwhile, the Relative Strength Index (RSI) is currently at 39, indicating mildly oversold conditions but not yet signaling a significant reversal. Given this context, traders are likely watching for a potential breakdown below the pivot point to enter short positions.
A selling opportunity arises below $1.08488, with a take-profit target set at $1.07941. A stop loss should be placed at $1.08766 to manage risk, as a break above the 50-day EMA would invalidate the bearish setup.
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