- EUR/USD marked on a fifth straight down day on Tuesday.
- Market headings take us data incorrectly in stride.
- US durable goods orders that are due Wednesday as euro dealers left to wait.
EUR/USD has slowed its recent fall, but still lost ground for a fifth consecutive trading day as the price action continues to test below 1,0800. The euro is struggling to find its feet as a remarkable lack of meaningful EU data on the economic dock leaves fibrousers according to geopolitical headlines and market flows from US data releases.
On Tuesday, the US Conference Board (CB) reported an increase in one year of expectations for consumer inflation, which increased to 6.2% in March from 5.8% in February. Consumers remain very concerned about the sustained high prices of essential household items, especially eggs, and the potential inflation effects of tariffs imposed under the Trump administration. Furthermore, CB’s consumer confidence survey revealed a decrease in future financial expectations that fell to a new 12-year-old low at 65.2 in March, significantly below the 80.0 mark, typically signaling a possible recession.
Adding to these concerns released Moody’s Ratings Agency a strong warning early Tuesday, highlighting a “deterioration” in the US tax strength, especially with regard to the rising challenges of serving US debt. Moody’s also expected that the country’s fiscal force is likely to be exposed to a long -term decline, a statement that is likely to anger Donald Trump and his administration, which is currently in favor of a significant increase in the debt ceiling from Congress.
In US economic news, durable goods orders are set to be released during the New York market session. In general, these orders are expected to fall by -1.0% in February after a solid rebound of 3.2% in January.
EUR/USD price forecast
A stable five-day drop has pushed back the EUR/USD under the 1,0800 grip, and the couple could be ready for an excess of the 200-day exponential sliding average (EMA) near 1,0675. A short -term turn has withdrawn fiber after a bullish push to the 1,0950 technical level that is fizzled, and EUR/USD now has a fresh technical ceiling to fight with if bidders are able to get their ship’s side down again.
EUR/USD Daily Diagram
Frequently asked questions about euro
The euro is the currency for the 19 EU countries belonging to the euro zone. It’s the second largest traded currency in the world behind the US dollar. By 2022, it accounted for 31% of all currency transactions with an average daily turnover of over $ 2.2 trillion a day. EUR/USD is the most traded currency paper in the world that accounts for an estimated 30%discount 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 eurozone. The ECB sets the interest rate and manages monetary policy. 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 interest rates – will usually benefit the euro and vice versa. The ECB Board Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by managers of the national banks in the euro area and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone -inflation data, measured by the harmonized index for consumer prices (HICP), is an important econometric for the euro. If inflation increases more than expected, especially if over ECB’s target of 2%, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its colleagues will usually benefit the euro as it makes 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, Manufacture and Services PMIs, Employment and Consumers’ Mood Investigations can all affect the direction of the individual currency. A strong economy is good for the euro. Not only does it attract more foreign investment, but it can encourage the ECB to set up interest rates that will directly strengthen the euro. Otherwise, if financial 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 important as they account for 75% of the eurozone economy.
Another significant data waiver for the euro is the trade balance. This indicator measures the difference between what a country earns on its export and what it spends on imports over a given period. If a country produces a lot of sought -after export, its currency will win in value exclusively from the extra demand created by foreign buyers trying to buy these goods. Therefore, a positive net spirit balance strengthens a currency and vice versa for a negative balance.