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MENAFN- Daily Forex)
- At the beginning of this week's trading, the EUR/USD currency pair is expected to stabilize around its recent losses, which extended to the support level of 1.0332 last week.
- Technically, this is the lowest level for the currency pair in the forex market in two years.
- Before attempting to rebound upwards, the week's trading closed around the level of 1.0418. The downward trend remains the strongest.
Magnitude of Euro Loss
According to recent forex market trading, the Euro has declined by 4.76% against the US dollar over the past 52 weeks. Recently, the EUR/USD has declined by 4.21% since the beginning of the month. Furthermore, the Euro has declined by 5.54% against the dollar since the beginning of 2024 Slowdown Pressures Euro Performance
Recently, investor appetite for the single European currency, the Euro, has weakened. After it was announced that business activity in the Eurozone contracted unexpectedly this month, raising concerns about the outlook for the European economy and indicating that the European Central Bank will need to be more aggressive with interest rate cuts. According to economic data results, the Purchasing Managers' Index for service providers and manufacturers weakened. Political crises in Germany and France, as well as the threat of tariffs from the Donald Trump presidency, also affected the currency.
On another influential front, a key measure of wages in the eurozone jumped by the most since the euro was introduced for trading in 1999 - a move that complicated the European Central Bank's plans to cut interest rates as inflation declines. As announced, negotiated wages in the third quarter rose by 5.4% year-on-year. This was higher than 3.5% in the previous three months and was largely driven by Germany.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money The European Central Bank's Vision of Trump's Threats
In this regard, at the end of last week, European Central Bank President Christine Lagarde said that the European Union faces growing threats to its trade with other parts of the world and must respond by deepening capital markets to finance innovation and increase productivity. Lagarde's concerns came as US President-elect Donald Trump wants to raise tariffs on imports from a wide range of countries.
Lagarde added, "The geopolitical environment has become less favourable, with growing threats to free trade from around the world." Also, "As the most open of the major economies, the European Union is more exposed to these trends than others." Added, Lagarde that with the source of growth at risk, Europe needs to move "urgently" to increase the financing available to innovative new companies that can help drive economic expansion, with many of them having to rely on funding from the United States and elsewhere.
EURUSD Chart by TradingViewEUR/USD Analysis Today:
My technical outlook for the EUR/USD currency pair remains unchanged. The overall trend remains downward, and as mentioned before, moving below the 1.0500 support level will further strengthen the bears' control. Consequently, do not be surprised if the pair tests lower levels that may reach the currency pair's parity level if the weakness factors from Trump's trade and the economic slowdown in the Eurozone led by Germany continue. Currently, the closest support levels for the EUR/USD are 1.0335, 1.0280, and 1.0160, respectively. Technical indicators continue to move towards oversold levels after recent losses/USD Trading Signals:
You should be cautious as the EUR/USD will remain bearish. Any attempt to rebound upwards will be a selling opportunity.
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