Euro (EUR) Forecast: EUR/USD and EUR/GBP Week Ahead Outlooks

EUR/USD Forecast – Prices, Charts, and Analysis

  • EUR/USD – A short-term bullish channel remains in place.
  • EUR/GBP – Daily chart turning negative.

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FX markets have been relatively quiet overall in a holiday-shortened week, with the British Pound the notable exception. The Euro has edged higher against the US dollar, consolidating its recent gains, while the single currency has struggled against the British Pound and is back at lows last seen over two weeks ago. Next week’s economic calendar has a few high-importance Euro and US dollar data releases, mainly inflation-related, and these will steer the two currencies over the course of the week.

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British Pound Latest: GBP/USD Boosted by Positive PMI Data

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The latest look at ECB interest rate expectations now shows the first full 25 basis point rate cut being pushed back by one meeting, from April to June. The market is now pricing in 83 basis points of cuts compared to around 93 basis points of cuts around a week ago. While notable, especially the timing of the first rate cut, these probabilities change all the time and should be treated as a guide only.

EUR/USD has enjoyed a positive week and continues to consolidate, and build on, its recent rally. The break above the 200-dsma has given the pair an extra boost, highlighted by the recent formation of a bullish channel. As long as this channel holds, the pair should soon test 1.1000 before an important zone between 1.1076 and 1.1096 comes into focus. Support is seen around 1.0900.

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EUR/USD Daily Price Chart

IG Retail trader data shows 43.03% of traders are net-long with the ratio of traders short to long at 1.32 to 1.The number of traders net-long is 3.66% higher than yesterday and 3.59% higher than last week, while the number of traders net-short is 0.32% lower than yesterday and 5.28% higher than last week.

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Change in Longs Shorts OI
Daily -11% 3% -3%
Weekly 2% -2% 0%

What does it mean for price action?

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The EUR/GBP chart highlights Sterling’s strength this week after a better-than-expected UK PMI report gave the British Pound a boost. EUR/GBP is currently trading around 0.8675, a full point lower than Monday’s high print. The daily chart shows UER/GBP remains in a longer-term uptrend, but a break below the last higher low at 0.8650 will negate this pattern. EUR/GBP is also trying to break below the 200-day simple moving average and a close and open below here will confirm a negative outlook for the pair.

EUR/GBP Daily Chart

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What is your view on the EURO – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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