Euro to US Dollar
- By date
- Metadoro first
The single currency is going to break through the nearest technical support at 1.07 against the Greenback. Any attempt to move below would be a good sell opportunity in EURUSD with the next possible price target in between of 1.0520 and 1.0550.
The latest portion of US jobs data literally turned the prevailing ideas about rate cut chances. The American economy offered extra workplaces of 353,000 in January and 333,000 in December, with an impressive revision of the latter number from the initially estimated 216,000. The shift was a result of an official annual calibration process. Average hourly wages added 0.6% MoM, speeding from 0.4% a month ago. Good for employees, stressful for equity investors, as pro-inflationary factors shrank bets for the Fed fund rate cut in March to only 20%. The views of futures traders at Chicago Mercantile Exchange (CME) were balanced at nearly 40-60% several days ago, even after the Fed chair Jerome Powell cooled passions for early dovish moves by saying he did "not think it’s likely" to reach a level of confidence in a rate cut decision "by the time of the March meeting to identify March is the time to do that".
The Wall St rally was challenged under added danger yet stood this local test of endurance to close the last week above 4,950 for the S&P 500 broad barometer. Even mega cap businesses became highly separated depending on details of their Q4 earnings and 2024 projections. Over the past week, Facebook owner Meta soared by 20.5%, NVIDIA stock price gained 8.4%, Amazon added nearly 8%, while Google shares dropped by 6.4%, Apple lost 3.4%. Tesla stock remained in a steep downward slope by 25% since the end of 2023. This implies a rather selective mood, with an increased attention to other firm's quarterly reports and more Fed speakers in the coming days. The US Dollar may also use a chance for further strengthening on longer rate pause estimates.
Euro to US Dollar
- The pair has the highest liquidity in the market and a vast number of trads are made with the pair. So, its movements largely indicates the behavior of the currency market in general. The pair is the easiest for technical analysis as it mostly follows the rules of it;
- The pair is likely the first one that every novice will meet during his/her first days in trading;
- Brokers usually have the lowest or zero trading fees on the pair. Brokers sometime give positive swaps on the pair, so a trader may make some money while keeping it for the longer term, and getting the profit on positive swap;
- The U.S. Dollar, or Greenback, is the leading currency in this pair, so it has the most influence on its movements. So, factors affecting the U.S. Dollar should be especially highlighted during technical and fundamental analysis of the pair;
- The EUR/USD is largely driven by two major economies and actions of the two largest central banks – The Federal Reserve (Fed) and European Central Bank (ECB). So, a trader should be focusing on macroeconomic data for both economies, including GDP, Consumer Price index (CPI), labour market indications, and statements of the central bank officials with a focus on the top officials of the Fed and ECB;
- U.S. 10-year Treasuries yields to German 10-year Bund ration is an indication of the strength of either currency. The higher the value, the stronger the Dollar;
- EUR/USD has a strong correlation with other European currencies, like the British Pound to the U.S. Dollar (GBP/USD) or the U.S. Dollar to the Swiss Franc (USD/CHF), and with cross rates of the Euro to other currencies. The pair has a strong exposure to USD/JPY, USD/CAD, and some other currency pairs.
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