EUR/USD Analysis Summary Today
- Overall Trend: Neutral.
- Today's EUR/USD Support Levels: 1.1670 – 1.1600 – 1.1540.
- Today's EUR/USD Resistance Levels: 1.1740 – 1.1800 – 1.1870.
EUR/USD Trading Signals:
- Buy EUR/USD from the support level of 1.1620 with a target of 1.1800 and a stop loss of 1.1570.
- Sell EUR/USD from the resistance level of 1.1760 with a target of 1.1600 and a stop loss of 1.1800.
EUR/USD Technical Analysis Today:
At the start of this crucial week, the EUR/USD currency pair attempted to move higher, with gains extending to the 1.1770 resistance level. However, it quickly fell back amid renewed selling pressure, which pushed it to the 1.1670 support level, the lowest price for the Euro/dollar pair in a week, where it stabilized at the time of writing. The selling pressure on the most popular currency pair in the forex market came from broad US dollar strength as traders reacted to the new trade agreement between the United States and the European Union.
The US-EU agreement includes a 15% tariff on European exports, which is half of the 30% rate initially threatened by the United States. Certain goods, such as aircraft components and some chemicals, will be exempt from tariffs, while tariffs on automobiles will be reduced to 15%. The agreement also includes provisions allowing the EU to purchase US energy and increase its investments in the country.
Meanwhile, investors generally welcomed the agreement as a step toward easing trade tensions and promoting stability, it was largely anticipated by the markets. Furthermore, many in Europe view the agreement as unfavorable and punitive toward the EU.
Meanwhile, attention on the monetary policy front is shifting to the expected US Federal Reserve decision later this week. Ahead of that, based on the daily chart, bears' success in pushing EUR/USD below the 1.1600 support level will intensify the downward shift. The 14-day RSI may push below the midline, threatening the bullish outlook. The MACD is currently in a downward trend.
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The EUR/USD bullish scenario will hinge on bulls successfully pushing the pair above the 1.1780 resistance level once again. Today's euro trading is not expected to include any significant or influential economic data, but the US dollar will be on the lookout for the US job openings and US consumer confidence figures, all at 5:00 PM Cairo time.
Trading Tips:
We advise traders to sell the EUR/USD at this time, avoid risk, and monitor the reaction to this week's important events.
Global Banks' Forecasts for the Future of EUR/USD:
In this regard, UoB Bank sees the potential for a new rally: "As negative divergence begins to form, the Euro may exceed the 1.1795 US dollar level before any pullback is expected." However, the bank does not expect the EUR/USD pair to reach its 45-month high, stating: "Given the negative divergence, the key resistance level at 1.1830 is likely to be out of reach for now. On the downside, the support levels to watch are 1.1755 and 1.1735."
According to Scotiabank, the outlook appears positive, but it added: "We are looking for a short-term trading range between the 1.1700 support level and the 1.1800 resistance level." Any breakout above the 1.1830 level would trigger renewed speculation about a rapid move towards the psychological 1.20 resistance level.
On the monetary policy front, the European Central Bank held interest rates steady at its last monetary policy meeting, keeping the deposit rate at 2.00%, in line with strong expectations. According to the central bank, the information is broadly consistent with its previous assessment of inflation. It noted that the economy is resilient, but the outlook is exceptionally uncertain.
The ECB added that it will follow a data-dependent, meeting-by-meeting approach to determine the appropriate monetary policy stance.
For its part, Commerzbank commented: "After all the turmoil in recent months, such as... reaching an agreement will certainly bode well for the Euro, which is why we saw the EUR/USD pair return to the 1.18 level." However, the bank still points to a high degree of uncertainty, noting that "we should not forget that the EU is one of the US president's favorite concerns, and an agreement like the one currently being discussed would not be too bad for the EU—at least compared to other scenarios discussed in recent months."
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