By Ion Jauregui –ActivTrades Analyst
The EUR/USD is at a time of high expectation, with key European Central Bank (ECB) appearances and the release of quarterly U.S. Gross Domestic Product (GDP) promising to generate significant moves in the financial markets. Today, all eyes are on Christine Lagarde and Luis de Guindos, president and vice-president of the ECB, who will provide details that could reveal the institution's interest rate strategy. Uncertainty over monetary policy in the Eurozone remains a key determinant of EUR/USD performance.
The Role of the ECB and Market Expectations
The appearance of Lagarde and De Guindos has become one of the most anticipated events of the day. Investors are analyzing every word, looking for clues about possible monetary policy adjustments. Uncertainty about future interest rate moves directly affects the euro, as a more hawkish stance could weaken the currency, while a cautious stance or signs of easing could generate upward momentum. This attention is because the FX market reacts almost immediately to expectations about monetary policy, making EUR/USD a direct reflection of the economic outlook in the region.
The Impact of Quarterly GDP in the U.S.
On the other hand, in the United States, the quarterly GDP is expected to be published, with a growth projection of 2.3%, in contrast to the 3.1% of the previous period. This data is crucial for the dollar, as a slowdown in economic activity could weaken the US currency. Investors are watching to see if the US economy shows signs of slowing or if growth trends continue, which would have a direct impact on the EUR/USD. A lower than expected figure could translate into a loss of dollar strength, thus boosting the euro in the international market.
Technical Analysis
The EURUSD has recovered in a bullish push up to $1.09296 per euro on the 18th of this month, the correction was not long in coming and the correction has continued to 1.07614 in today's trading. This has all the feel of support in a bullish momentum given that today's candle is all green, so it is very likely that this sentiment will push the euro back towards its upper end of the range and look to test the $1.09296 price. This theory is supported by the fact that the triple crossover of averages has pushed the 50-average above the 100-average since the impulse and yesterday there was a golden crossover where the value of the 200-average is starting to move into position below the 100-average, signaling to us a possible price expansion. This theory is supported by the fact that the RSI has made a micro support at the 50% average so this corrective sentiment seems to have stopped. If today's price breaks above the 50-average we could see an advance towards $1.10 per euro. If the US GDP data surprises and Europe does not have enough bullish sentiment we could see a return to the current checkpoint (POC) around 1.05327, but this is not expected to happen with a US market on a war footing with Trump's tariffs threatening the economic stability of its companies in exports.
Other Financial Environment Variables
In addition to the ECB statements and the GDP data, other elements are influencing the macroeconomic environment. Cryptocurrencies, for example, are trading with high volatility; while Bitcoin moves around $87,000 and Ethereum around $2,000, these assets reflect the general uncertainty in the market. Likewise, Brent, coffee and gold also move in a context of caution and uncertainty, factors that affect risk perception and, by extension, EUR/USD.
In Asia, the indices show mixed movements. The Nikkei is down 0.9%, the Hang Seng is up 0.7% and the Shanghai Composite is little changed. These indicators reflect the diversity in the performance of international markets, although the main focus is on Wall Street's reaction. Yesterday, US indices ended in the red, with the S&P 500 down 1.1%, Nasdaq down 2% and Dow Jones down 0.3%. These dynamics are contributing to a cautious mood that is seeping into the FX market.
EUR/USD Outlook
In summary, the EUR/USD is at an inflection point where ECB statements and US macroeconomic data play a crucial role. Investors expect any hints on the future direction of monetary policy in the Eurozone or on the economic health of the US to trigger significant moves in the pair. Attention will be particularly focused on how ECB policymakers communicate, and the market's reaction to the GDP figure, which could reshape the direction of the dollar and, consequently, the euro. Technical analysis reveals that, after a recovery and a crossover of moving averages, the euro is holding up and could move towards $1.10 if it breaks above the 50-mark. However, global volatility and economic tensions warn investors to maintain a flexible and vigilant strategy.
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The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
The EUR/USD is at a time of high expectation, with key European Central Bank (ECB) appearances and the release of quarterly U.S. Gross Domestic Product (GDP) promising to generate significant moves in the financial markets. Today, all eyes are on Christine Lagarde and Luis de Guindos, president and vice-president of the ECB, who will provide details that could reveal the institution's interest rate strategy. Uncertainty over monetary policy in the Eurozone remains a key determinant of EUR/USD performance.
The Role of the ECB and Market Expectations
The appearance of Lagarde and De Guindos has become one of the most anticipated events of the day. Investors are analyzing every word, looking for clues about possible monetary policy adjustments. Uncertainty about future interest rate moves directly affects the euro, as a more hawkish stance could weaken the currency, while a cautious stance or signs of easing could generate upward momentum. This attention is because the FX market reacts almost immediately to expectations about monetary policy, making EUR/USD a direct reflection of the economic outlook in the region.
The Impact of Quarterly GDP in the U.S.
On the other hand, in the United States, the quarterly GDP is expected to be published, with a growth projection of 2.3%, in contrast to the 3.1% of the previous period. This data is crucial for the dollar, as a slowdown in economic activity could weaken the US currency. Investors are watching to see if the US economy shows signs of slowing or if growth trends continue, which would have a direct impact on the EUR/USD. A lower than expected figure could translate into a loss of dollar strength, thus boosting the euro in the international market.
Technical Analysis
The EURUSD has recovered in a bullish push up to $1.09296 per euro on the 18th of this month, the correction was not long in coming and the correction has continued to 1.07614 in today's trading. This has all the feel of support in a bullish momentum given that today's candle is all green, so it is very likely that this sentiment will push the euro back towards its upper end of the range and look to test the $1.09296 price. This theory is supported by the fact that the triple crossover of averages has pushed the 50-average above the 100-average since the impulse and yesterday there was a golden crossover where the value of the 200-average is starting to move into position below the 100-average, signaling to us a possible price expansion. This theory is supported by the fact that the RSI has made a micro support at the 50% average so this corrective sentiment seems to have stopped. If today's price breaks above the 50-average we could see an advance towards $1.10 per euro. If the US GDP data surprises and Europe does not have enough bullish sentiment we could see a return to the current checkpoint (POC) around 1.05327, but this is not expected to happen with a US market on a war footing with Trump's tariffs threatening the economic stability of its companies in exports.
Other Financial Environment Variables
In addition to the ECB statements and the GDP data, other elements are influencing the macroeconomic environment. Cryptocurrencies, for example, are trading with high volatility; while Bitcoin moves around $87,000 and Ethereum around $2,000, these assets reflect the general uncertainty in the market. Likewise, Brent, coffee and gold also move in a context of caution and uncertainty, factors that affect risk perception and, by extension, EUR/USD.
In Asia, the indices show mixed movements. The Nikkei is down 0.9%, the Hang Seng is up 0.7% and the Shanghai Composite is little changed. These indicators reflect the diversity in the performance of international markets, although the main focus is on Wall Street's reaction. Yesterday, US indices ended in the red, with the S&P 500 down 1.1%, Nasdaq down 2% and Dow Jones down 0.3%. These dynamics are contributing to a cautious mood that is seeping into the FX market.
EUR/USD Outlook
In summary, the EUR/USD is at an inflection point where ECB statements and US macroeconomic data play a crucial role. Investors expect any hints on the future direction of monetary policy in the Eurozone or on the economic health of the US to trigger significant moves in the pair. Attention will be particularly focused on how ECB policymakers communicate, and the market's reaction to the GDP figure, which could reshape the direction of the dollar and, consequently, the euro. Technical analysis reveals that, after a recovery and a crossover of moving averages, the euro is holding up and could move towards $1.10 if it breaks above the 50-mark. However, global volatility and economic tensions warn investors to maintain a flexible and vigilant strategy.
*******************************************************************************************
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication.
All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.