EUR/USD ends Friday struggling to stay at 1.08

  • EUR/USD returned to its bearish trend on Friday.
  • A broad rally in the Dollar Index continues to hit the Euro.
  • Next week: DST, EU CPI, US PCEPI and another NFP report.

EUR/USD pared a short-term bounce on Friday, closing the door on a clean bullish recovery and keeping bids trapped near the 1.0800 area to close the trading week. The pair lost another half a percentage point from Monday’s opening bids, posting a fourth consecutive week of losses and dragging the price action further from the late September peak just north of 1.1200.

The markets will begin next week with the start of daylight saving time across the European continent, which will shift market opening hours by one hour. The first half of the trading week is a quiet affair, with Euro traders awaiting Wednesday’s European growth update. EU Gross Domestic Product (GDP) growth is expected to remain stable in the third quarter, with the forecast in line with the previous quarter’s 0.2%. Meanwhile, the annualized growth figure is expected to rise from 0.6% to 0.8% year-on-year.

Next Thursday the representation of the Euro in the economic calendar will conclude, with the preliminary harmonized consumer price index (HICP) for October. EU headline HICP inflation is expected to rise to 1.9% year-on-year compared to 1.7% in the previous period.

Next week is a great opportunity for US Dollar traders. US Personal Consumption Expenditure Price Index (PCEPI) figures will be released on Thursday, followed by another monthly US Nonfarm Payrolls (NFP) report on Friday. The US core PCEPI is expected to have increased in September, forecast at 0.2% monthly compared to 0.1% in August. US NFP net job additions are expected to moderate to 140,000 net new jobs in October, down from 254,000 the previous month.

EUR/USD Price Forecast

The EUR/USD pair is currently trading below the 50-day EMA and the 200-day EMA, signaling a bearish sentiment in the market. The recent price action shows strong downward momentum since early October where the price broke below the 50-day EMA and continued to fall below the 200-day EMA, further confirming the bearish bias. The current price near 1.0795 is testing a support zone, as evidenced by the small body candles, suggesting some consolidation or a phase of indecision. If the support holds, we could see a temporary pullback towards the 1.0899 resistance level, coinciding with the 200-day EMA. However, a failure to break higher could invite further downward pressure.

The MACD histogram shows weakening negative momentum, but the signal lines remain in bearish territory, suggesting that sellers are still in control despite a possible short-term correction. If the price fails to break above the 50-day EMA near 1.0962, the pair could extend its decline. Smart Money Concepts (SMC) traders may notice a liquidity grab forming below previous lows, which could signal institutional buildup for a pullback. However, unless key resistance zones are recovered, the overall structure remains bearish, and a break below 1.0750 could open the door for further losses towards 1.0650.

EUR/USD Daily Chart

The Euro FAQs


The Euro is the currency of the 19 countries of the European Union that belong to the eurozone. It is the second most traded currency in the world, behind the US dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of more than $2.2 trillion per day. EUR/USD is the most traded currency pair in the world, accounting for an estimated 30% of all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2 %).


The European Central Bank (ECB), headquartered in Frankfurt, Germany, is the reserve bank of the eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the increase or decrease in interest rates. Relatively high interest rates (or the expectation of higher rates) tend to benefit the euro and vice versa. The Governing Council of the ECB makes decisions on monetary policy at meetings held eight times a year. Decisions are made by the directors of the Eurozone’s national banks and six permanent members, including ECB President Christine Lagarde.


Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), are an important econometric indicator for the euro. If inflation rises more than expected, especially if it exceeds the ECB’s 2% target, it forces the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to their counterparts tend to benefit the euro, making the region more attractive as a place for global investors to park their money.


The published data measures the health of the economy and may have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer confidence surveys can influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment, but it may encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest eurozone economies (Germany, France, Italy and Spain) are especially significant, as they represent 75% of the eurozone economy.


Another important data that is published about the Euro is the trade balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports during a given period. If a country produces highly in-demand export products, its currency will gain value simply from the additional demand created by foreign buyers seeking to purchase those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance.

Source: Fx Street

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