.jpg)
- The EUR/USD pair drifted mostly sideways on a quiet Wednesday, and is heading toward calm on Thursday.
- Fiber traders will be watching US unemployment claims on Thursday.
- Friday looms with Purchasing Managers’ Index (PMI) activity numbers on both sides of the Pacific.
EUR/USD On Wednesday as US markets exit for a mid-week holiday, the Fiber Index heads into the back half of the trading week with mid-level data on supply, leaving investors looking to Friday’s Purchasing Managers’ Index (PMI) activity numbers for meaningful results. Data releases to push sentiment in either direction.
Forex today: Attention turns to data from the Bank of England and the United States
US markets will be back in action on Thursday, just in time for the release of the latest US initial unemployment claims for the week ending June 14. The mid-market forecast sees new US jobless claims falling modestly to 235,000 from 242,000 previously, but they are still expected to exceed the four-week running average of 227,000.
The European Central Bank’s (ECB) latest economic bulletin is also expected early in the market window on Thursday, but little new information is expected as the ECB rehashes what has already been covered in previous public appearances by central bank policymakers. European Union after the last interest rate call.
Friday will end the trading week with a frenetic bang. The pan-European PMI survey numbers will start falling in markets starting at 07:30 GMT, followed by the US PMI numbers at 13:45 GMT. The European HCOB manufacturing PMI is expected to rise to 47.9 m/m from 47.3, with the services component expected to rise to 53.5 from 53.2. On the US side, both manufacturing and services components are expected to decline. The manufacturing component is expected to decline to 51.0 from 51.3, and the services component Purchasing managers index It is expected to fall to 53.3 from 54.8.
Technical forecast for the EUR/USD pair
The EUR/USD pair is currently facing resistance from the 200 hourly Exponential Moving Average (EMA) at the 1.0767 level, making it difficult for the currency pair to cross the 1.0750 level. Although it has shown some recovery from the recent lows near 1.0670, the upward momentum is hampered. Japanese candlesticks are indicating a potential bullish move towards the 200-day EMA around the 1.0800 level.
However, the presence of technical resistance near 1.1140 from the late December highs is limiting the upside momentum. If this trend continues, EUR/USD could face a bearish reversal, which could lead to new lows for 2024, possibly falling below 1.0600.
EUR/USD hourly chart
Daily chart of EUR/USD
Frequently asked questions about the euro
The euro is the official currency of the twenty European Union countries that belong to the eurozone. It is the second most traded currency in the world after the US dollar. In 2022, It has been calculated For 31% of all foreign exchange transactions, with an average daily trading volume of more than $2.2 trillion per day. The EUR/USD currency pair is the most traded currency pair in the world. accounting At a discount of 30% on 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 euro area. The European Central Bank 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 to raise or lower interest rates. Relatively high interest rates – or the expectation of higher interest rates – usually benefit the euro and vice versa. The ECB’s Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by the heads of the eurozone’s national banks and the six permanent members, including the President of the European Central Bank, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is one of the important economic indicators for the euro. If inflation rises beyond expected, especially if it is above the ECB’s 2% target, this forces the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to their counterparts usually benefit the euro, because they make the region more attractive as a place for global investors to park their money.
Data releases measure the health of the economy and can affect the euro. Indicators such as GDP, manufacturing and services PMIs, employment, and consumer confidence 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, it may encourage the European Central Bank to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro will likely fall. Economic data for the four largest Eurozone economies (Germany, France, Italy and Spain) are of particular interest, as they represent 75% of the Eurozone economy.
Another important data 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 during a certain period. If a country produces highly desirable exports, its currency will gain value from the additional demand generated by foreign buyers seeking to purchase these goods. Therefore, a positive net trade balance strengthens the currency and vice versa for a negative balance.
