logo |

News

    Home   >     Industry    >     Main body

    Euro Forecast: EUR/USD Price Outlook Bearish Ahead of Key Eurozone Data

    Abstract:EUR/USD tumbled last week on the day of the ECBs latest policy announcement, and that weakness is set to continue this week as a flood of major Eurozone economic statistics is released.

      Fundamental Euro Forecast: Bearish

    •   The European Central Banks Governing Council proved just as dovish as analysts had expected last week, accentuating a decline in EUR/USD that started before the announcement and continued after it.

    •   Now, further losses are likely over a week packed with important Eurozone data ranging from Germanys Ifo index to official statistics on GDP growth, inflation and unemployment.

    EUR

      Recommended by Martin Essex, MSTA

      Download our fresh Q3 Euro Forecast

      Get My Guide

      Euro price at risk of further losses

      The coming week is packed with potentially high-impact market-moving economic data from the Eurozone and, ahead of it, the slide in EUR/USD that began last Thursday is most likely to continue. What happens after the numbers, that are mostly unveiled on Thursday and Friday, depends of course on how strong or weak they are but last weeks policy statement by the European Central Bank was so dovish that further Euro losses are now highly likely.

      In a nutshell, the ECB and its President Christine Lagarde made it crystal clear that Eurozone monetary policy will remain highly accommodative for the foreseeable future, with its deposit rate not rising from minus 0.5% until inflation hits 2.0% and stays there. It would indeed allow “a transitory period” in which inflation is moderately above its new 2% inflation target, the ECB said.

      That reinforces the view that the ECB will be one of the last major central banks to tighten monetary policy and that the Euro could therefore remain weak not just against the US Dollar but all round.

      EUR/USD Price Chart, Daily Timeframe (March 24 – July 22, 2021)

    EUR/USD

      Source: IG (You can click on it for a larger image)

      Starts in:

      Live now:

      Jul 27

      ( 09:07 GMT )

      Recommended by Martin Essex, MSTA

      Trading Sentiment

      Register for webinar

      Join now

      Webinar has ended

      Week ahead: GDP, inflation and unemployment

      On a normal week, the release of Germanys Ifo index for July Monday and of the GfK version of German consumer confidence in August Wednesday would be the focus, but both will be outweighed by the official statistics out later in the week. For the record, analysts are expecting marginal improvements in both, suggesting that the global economic recovery has not yet been derailed by the spread of the delta variant of Covid-19.

      However, given the markets‘ current fixation on inflation, it will be the German July consumer price index numbers Thursday and the equivalent data for the Eurozone Friday that will likely attract most attention. The consensus among forecasters is that headline German inflation jumped to a preliminary 3.2% in July, up from 2.3% the month before, but that the Eurozone number just edged up to 2.0% from 1.9%, bang in line with the ECB’s target.

      GDP growth data for the second quarter will show large improvements from the first quarter, with the German economy expected to have expanded by 2.1% quarter/quarter, up from minus 1.8%, and the Eurozone economy to have grown by 1.5% quarter/quarter, up from minus 0.3%.

      At this point in the economic cycle, labor-market data are less important but the forecast fall in the German unemployment rate to 5.8% in July from 5.9% the month before would round out the picture of a continuing economic recovery and one which the ECB is in no hurry to nip in the bud by tightening monetary policy prematurely.

    Top

      Recommended by Martin Essex, MSTA

      Get Your Free Top Trading Opportunities Forecast

      Get My Guide

    Australia Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand

    United States Dollar

    • United Arab Emirates Dirham
    • Australia Dollar
    • Canadian Dollar
    • Swiss Franc
    • Chinese Yuan
    • Danish Krone
    • Euro
    • British Pound
    • Hong Kong Dollar
    • Hungarian Forint
    • Japanese Yen
    • South Korean Won
    • Mexican Peso
    • Malaysian Ringgit
    • Norwegian Krone
    • New Zealand Dollar
    • Polish Zloty
    • Russian Ruble
    • Saudi Arabian Riyal
    • Swedish Krona
    • Singapore Dollar
    • Thai Baht
    • Turkish Lira
    • United States Dollar
    • South African Rand
    Current Rate  :
    --
    Amount
    Australia Dollar
    Available
    -- United States Dollar
    Risk Warning

    The Database of WikiFX comes from the official regulatory authorities , such as the FCA, ASIC, etc. The published content is also based on fairness, objectivity and fact. WikiFX doesn't ask for PR fees, advertising fees, ranking fees, data cleaning fees and other illogical fees. WikiFX will do its utmost to maintain the consistency and synchronization of database with authoritative data sources such as regulatory authorities, but does not guarantee the data to be up to date consistently.

    Given the complexity of forex industry, some brokers are issued legal licenses by cheating regulation institutes. If the data published by WikiFX are not in accordance with the fact, please click 'Complaints 'and 'Correction' to inform us. We will check immediately and release the results.

    Foreign exchange, precious metals and over-the-counter (OTC) contracts are leveraged products, which have high risks and may lead to losses of your investment principal. Please invest rationally.

    Special Note, the content of the Wikifx site is for information purposes only and should not be construed as investment advice. The Forex broker is chosen by the client. The client understands and takes into account all risks arising with Forex trading is not relevant with WikiFX, the client should bear full responsibility for their consequences.