The Euro’s Movement in the Forex Market
- EUR/USD retreats below 1.0800 after gaining on Thursday.
- Fed lowers policy rate by 25 bps, in line with expectations.
- Technical analysis shows lack of bullish momentum in the near term.
After a decline on Wednesday, the EUR/USD pair saw a 0.7% increase on Thursday, only to struggle below 1.0800 on Friday. The US Dollar initially surged following the presidential election results but weakened as investors took profits ahead of the Fed’s policy announcements.
US Dollar Performance This Week
The US Dollar showed varied performance against major currencies this week, with notable strength against the Swiss Franc. The market reaction to the Fed’s rate cut remained subdued, with a 70% probability of further easing in December according to the CME FedWatch Tool.
Fed Chairman Powell emphasized a balanced view on risks to the job market and inflation, with no immediate impact from the election results on monetary policy. The cautious market sentiment on Friday supported the USD against its peers, limiting EUR/USD’s upward movement.
The upcoming release of the UoM Consumer Sentiment Index for November and the stability of US stock index futures will influence the USD’s performance in the near term.
EUR/USD Technical Analysis
The Relative Strength Index (RSI) on the 4-hour chart indicates a bearish bias, with key support at 1.0750, 1.0700, and 1.0680. Resistance levels are at 1.0800 and 1.0870.
Euro FAQs
The Euro is the currency for 19 EU countries in the Eurozone, with significant trading volume and liquidity. The European Central Bank (ECB) in Frankfurt manages monetary policy and interest rates to maintain price stability and stimulate growth.
Eurozone inflation data, economic indicators, and trade balance are crucial factors influencing the Euro’s value and performance in the global market.
Overall, understanding the dynamics of the Euro and USD movements can provide valuable insights for investors and traders navigating the forex market.