Euro Strengthens Against US Dollar in Asian Trading Session
- EUR/USD holds positive ground around 1.1165 in Friday’s Asian session.
- The pair keeps the positive stance above the key 100-period EMA, with the bullish RSI indicator.
- The first upside barrier emerges at 1.1172; the initial support level is located at 1.1130.
As the Asian trading hours progress on Friday, the EUR/USD pair continues to trade in positive territory near 1.1165. This uptrend is supported by the weakening US Dollar (USD) following an unexpected 50 basis point rate cut by the US Federal Reserve during its September meeting.
The bullish outlook for the EUR/USD pair remains strong as it is well supported above the key 100-period Exponential Moving Averages (EMA) on the 4-hour chart. The Relative Strength Index (RSI) is also signaling upward momentum, with a reading above the midline near 67.45, indicating favorable conditions for further upside movement.
Key Levels to Watch
A decisive break above the upper boundary of Bollinger Band at 1.1172 could lead to a rally towards the 1.1190-1.1200 region, which serves as a significant resistance zone. Beyond this, the next hurdle lies at 1.1240, the high from July 19.
In case of a bearish scenario, the initial support level is at 1.1130, with further downside potential towards the psychological level of 1.1100. The 100-period EMA at 1.1088 also acts as a critical support level for the pair.
Euro FAQs
Overview of the Euro Currency
The Euro is the currency used by 20 European Union countries within the Eurozone. It is the second most traded currency in the world after the US Dollar, with a significant daily turnover of over $2.2 trillion. The EUR/USD pair is the most traded currency pair globally, accounting for approximately 30% of all transactions.
Role of the European Central Bank (ECB)
The European Central Bank (ECB) in Frankfurt, Germany, acts as the reserve bank for the Eurozone. It is responsible for setting interest rates and managing monetary policy to maintain price stability. The ECB’s decisions, including interest rate changes, impact the value of the Euro in the global market.
Factors Influencing Eurozone Economy and Euro Currency
- Eurozone inflation data, monitored through the Harmonized Index of Consumer Prices (HICP), plays a critical role in shaping ECB’s monetary policy.
- Economic indicators such as GDP, PMIs, employment data, and consumer sentiment surveys influence the Euro’s strength.
- The Trade Balance of Eurozone countries also affects the value of the Euro, with a positive balance strengthening the currency.
Understanding these factors can provide insights into the performance of the Euro against other currencies and its impact on global financial markets.