EUR/USD Forecast – Prices, Charts, Analysis
- The third quarter revision will help Germany avoid a technological recession.
- Eurozone growth was flat in the fourth quarter.
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Germany’s economy narrowly avoided slipping into technical recession after the country’s third-quarter GDP was lifted from -0.1% flat. Germany’s preliminary fourth quarter GDP was in line with market expectations of -0.3%.
According to the Federal Statistical Office (Destatis):
“Gross domestic product (GDP) decreased by 0.3% in the fourth quarter of 2023 compared to the third quarter of 2023 after adjusting for price, seasonal and calendar fluctuations. After some stagnation, the economic performance deteriorated in the fourth quarter of 2023. Compared to the previous quarter, there was a noticeable decline in gross fixed capital formation, especially in the construction and machinery industries. Prices, seasons and calendars Equipment after adjustment.”
The eurozone also missed out on entering recession as growth flattened out in the fourth quarter, beating expectations of -0.1% after the economy shrank by 0.1% in the third quarter.
For all the economic data and events that move the markets, see real-time DailyFX Economic Calendar
The euro is currently trying to stabilize around the 1.0825 level after hitting a low of 1.0796 on Monday. Expectations that the ECB will cut interest rates sooner than initially expected have weighed on the euro, with the single currency weakening since late last year. According to the latest market forecasts, there is a 75% chance that the ECB will begin a rate cutting cycle at its April 11 Governing Council meeting, reducing the deposit facility rate to 2.50% from current levels by the end of the year. Four%.
The first support for EUR/USD is seen at 1.0787, ahead of the previous lows that fall to 1.0724. EUR/USD is currently below its 200-day simple average, and if this situation continues, the above support levels will likely be tested.
The latest Fed monetary policy decisions are expected to be announced tomorrow, and traders are hoping that Chairman Powell will at least agree on when the Fed will start cutting interest rates. Financial markets are currently pricing in a 50-50 chance of a March rate cut, with the May 1st meeting fully priced in.
EUR/USD daily chart
Charts using TradingView
According to IG Retail Trader data, 55.69% of traders are net long, with a trader long to short ratio of 1.26 to 1. The number of traders who are net long is 3.86% higher than yesterday and 16.12% higher than last week. The percentage of traders who are net short increased by 0.63% from yesterday and decreased by 16.84% from last week.
To see what this means for EUR/USD, download the full retail sentiment report below
|
change |
long |
shorts |
OI |
| every day | 3% | Four% | 3% |
| weekly | 8% | -Four% | 2% |
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