EURUSD Forecast & Predictions for 2024, 2025–2026, and Beyond

The EURUSD is one of the major and most traded currency pairs in the Forex market. Traders analyze its future price not only for trading purposes but also to gauge the economic conditions of the EU and the US, along with the global market sentiment.

Since the pair is widely traded, predicting its exchange rate from a long-term investment perspective can be challenging. The EURUSD exchange rate movement is influenced by interest rate differentials, inflation, unemployment rates, trade, and capital flows. At the same time, much of the pricing is related to unforeseen event risks and market sentiment changes. With that in mind, let’s turn our attention to a detailed analysis of the EURUSD exchange rate.

The article covers the following subjects:

Highlights and Key Points

• In the short term, the pair may correct to the support levels near 1.1107 and 1.1125. If the rate remains above these supports, EURUSD quotes will likely start increasing again.
• In the medium term, one may consider long positions on the correction at the September low of 1.1000, as well as at the Ichimoku cloud, which is pointing to an uptrend.
• The long-term trend is upward. Therefore, the rate is expected to soar until the end of 2024. The growth target is the 2023 high in the area of 1.1275. If the price consolidates above this level, the uptrend may continue to 1.1495.
• LongForecast and PandaForecast analysts believe that the price may keep growing in 2024 and 2025.
• According to long-term forecasts for 2026–2027, the euro is projected to embark on a downward trajectory. The single currency will likely decrease to 1.0250–1.0300 by the end of 2027. Notably, these forecasts may be adjusted over time, depending on economic developments.
• When trading the EURUSD pair, it is essential to closely monitor the economic reports of both the EU and the US. The decisions of the ECB and the Fed regarding interest rates, along with the rhetoric of central bank representatives, can have a significant impact on the balance between buyers and sellers.
• Significant political events, including the US presidential election, may trigger a temporary increase in the EURUSD volatility.
• Historical data indicates that the currency pair’s price tends to decline during periods of market turbulence and heightened geopolitical uncertainty. Due to its high liquidity, the EURUSD currency pair is an optimal instrument for trading.
• Investing in the EURUSD pair will be profitable once the pair breaches and consolidates above the key resistance of 1.1275. In this scenario, one may consider long-term purchases with the initial target of 1.1495.
• EURUSD: Technical analysis suggests the euro is trading in a medium-term downtrend. The asset has pierced the Target Zone 3, 1.0710 – 1.0693, and hit the Target Zone 4, 1.0542 – 1.0525.

EURUSD Characteristic Features

The EURUSD is a major currency pair on Forex, known for its high liquidity. This is not a surprise as it includes the world’s two major reserve currencies. Most Forex trades are made in EURUSD, comprising about 20% of the total volume.

The EURUSD rate serves as an indicator that compares the US and EU economies. If the US economy steadily grows and the EU faces problems, the rate of the euro against the US dollar may drop. Conversely, if America’s growth rate declines and the eurozone thrives, the EURUSD will increase.

 EURUSD key features:

• Trading hours on Forex. The EURUSD pair is traded around the clock from Monday to Friday, with the highest activity occurring during the European and American sessions when trading volumes and rate movements are the most significant.
• Volatility. The EURUSD pair is characterized by medium volatility. The asset can move by 100 pips and more during important news releases. The exchange rate performance analysis shows that the average daily EURUSD volatility is about 80 pips.
• Spread is one of the main advantages of the EURUSD pair. Due to the highest liquidity, the EURUSD spread is the lowest. Typically, it does not exceed one pip on popular ECN accounts.

Fundamental Factors Affecting the EURUSD Price in 2024

In 2024, the EUR/USD currency pair was trading in a narrow range of 1.0600–1.1210. At the beginning of the year, the pair’s quotes declined against investors’ expectations that the European Central Bank would be the first to reduce interest rates. Indeed, the ECB cut the interest rate by 25 basis points to 4.25% from 4.50% on June 6. In the US, the Fed began its monetary expansion cycle later on September 18. The interest rate was lowered to 5.0% from 5.50%. Below is the ECB’s interest rate path.

Another factor contributing to a bearish scenario was the sharp decline in the eurozone GDP growth rate. As illustrated in the screenshot below, economic growth rates in quarterly terms began to decline from Q2 2022 and reached a low of 0.0% in Q3 2023. The growth rate subsequently remained below 1% per quarter, reaching record lows. These developments reinforced the bearish outlook for the EURUSD pair, as market participants feared a potential recession in the EU.

By midyear, the situation had evolved. The eurozone saw a decline in inflation, which approached the ECB’s forecasts. From an annualized rate of 2.8% as of January 2024, inflation declined to 2.2% by August 2024. In response to this development, the ECB opted to implement a more accommodative monetary policy, aiming to bolster economic activity. Investors’ expectations regarding the ECB’s strategy reinforced the euro’s growth trajectory, with the currency pair showing an upward trend since April 2024.

However, as the autumn approached, the growth of the EU economy once again gave rise to intense debate among investors. In September, business activity in the private sector declined significantly in the eurozone’s largest economies. In Germany, the Manufacturing PMI plummeted sharply, while in France, the Services PMI saw a notable plunge.

The HCOB Flash Germany Composite PMI, as reported by S&P Global, fell more than expected to 47.2, representing the lowest reading in seven months. In France, the Composite PMI slumped to 47.4 from 53.1, which was significantly below the Bloomberg forecast of 51.5.

Following the publication of the data, the euro dropped to 1.1106, with EU government bonds rising and the yield on 10-year German Bunds falling by four basis points.

The latest economic data indicate that the slowdown in the currency bloc is becoming increasingly evident, following a period of weaker growth earlier in the year. Lower interest rates can provide a boost to the economy. In September, the ECB cut rates for the second time in a year, and a further reduction is likely. However, many of the issues are structural in nature and require more comprehensive solutions.

Germany has been identified as the point of vulnerability. The Bundesbank has indicated that a recession was imminent, citing adverse developments pertaining to the automotive industry. In a disappointing turn of events for investors, Mercedes-Benz Group AG followed BMW in cutting its profit forecast. Meanwhile, Volkswagen AG voiced concerns that low demand could result in the closure of its production plants in Germany. The HCOB Germany Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, reached a one-year low, while the services sector sagged significantly. Bloomberg analysts anticipate that the German economy will resume growth towards the end of the year.

France is experiencing a similar trend, with the services sector, which previously received an unexpectedly strong boost from the Olympic Games in Paris, now facing a sharp decline. The index has fallen to 48.3 from 55, below the projected level of 53.1.

The Bank of France projects a 0.8% growth rate for the economy this year, although this projection is subject to potential fluctuations due to the prevailing political uncertainty following the recent parliamentary elections. Prime Minister Michel Barnier’s government faces significant challenges in reducing the budget deficit, which has already exceeded the 3% of GDP threshold set by the European Union.

France has joined the ranks of eurozone economies experiencing severe growth difficulties. This supports the assumption that the surge in the services sector in August was directly attributable to the Olympics.

In light of these circumstances, the European currency will likely show constrained growth. In September, the EURUSD pair saw a significant increase due to market expectations of a notable reduction in interest rates in the US. The Federal Reserve reduced the interest rate by 50 basis points in a single bold move. In the coming period, markets will monitor developments in monetary policy in the US and the EU. Notably, the Fed’s higher interest rate of 5.00% against the ECB’s key rate of 3.65% creates solid grounds for purchasing the US dollar.

The EURUSD price is also influenced by global geopolitical developments. Due to various military conflicts, for example, in the Middle East, investors tend to favor safe-haven assets, including the US dollar. This results in a decline in EURUSD quotes.

Therefore, the euro may rise moderately against the greenback to the 2023 high of 1.1275. However, growth beyond this level is uncertain and will depend on the US Federal Reserve’s monetary policy and political factors.

EURUSD Current Rate

The current EURUSD exchange rate is $1.05163.

Euro/dollar weekly price forecast as of 18.11.2024

The euro continued its medium-term downtrend last week. As a result, the price has reached the Target Zone 4, 1.0542 – 1.0525. If the asset manages to settle above this zone, an upward correction will start. In this case, the quotes may grow to the resistance (A) 1.0742 – 1.0720. Once this zone is reached, consider short trades with the first target of 1.0619 and the second one near 1.0496.

If the price pierces the resistance (A), the correction will continue to the trend’s boundary 1.0865 – 1.0832. One may consider short trades near this zone.

If the price breaks through the Target Zone 4 from above this week, the next bearish target will be the Target Zone 5, 1.0318 – 1.0295. In this case, the resistance areas will be shifted down by the number of pips that the price will move after breaching the November 14 low.

EURUSD trading ideas for the week:

Sell at resistance (A) 1.0742 – 1.0720. TakeProfit: 1.0619 – 1.0496. StopLoss: 1.0784.

Technical analysis based on margin zones methodology is presented by an independent analyst, Alex Rodionov.

EURUSD Rate Forecast for 2024 – Experts Predictions

The majority of analysts concur that the EURUSD exchange rate will continue to appreciate throughout the remainder of 2024, reaching fresh yearly highs. Moderate growth with minor corrections is expected. However, WalletInvestor experts have a more pessimistic outlook, projecting a slight decline in quotes to 1.1040.

Long Forecast

Price range in 2024: $1.0950–$1.1610 (as of 30.09.2024).

LongForecast analysts assume that the long-term uptrend will continue. At the end of 2024, the price will reach 1.1440. However, the pair may correct to the level of 1.0950.

Month	Open, $	Low–High, $	Close, $	Change, %
October	1.117	1.095-1.148	1.112	0.6%
November	1.112	1.097-1.152	1.135	2.7%
December	1.135	1.127-1.161	1.144	3.5%

PandaForecast

Price range in 2024: $1.0689–$1.1698 (as of 30.09.2024).

Analysts at PandaForecast also expect the EURUSD rate to continue rising until the end of 2024. By December, the average price will reach 1.1387. Minor corrections within the bullish trend are possible. The maximum possible price is 1.1698 and the minimum price is 1.1024.

Month	Average price, $	Minimum, $	Maximum, $	Volatility, %
October	1.0961	1.0689	1.1205	4.60 %
November	1.1288	1.1188	1.1435	2.16 %
December	1.1387	1.1024	1.1698	5.76 %

WalletInvestor

Price range in 2024: $1.0990–$1.1080 (as of 30.09.2024).

Analysts at WalletInvestor offer a “neutral-negative” outlook for the EURUSD pair. They project that the pair will decline towards 1.1040 by the end of the year without significant price fluctuations.

Month	Open, $	Close, $	Minimum, $	Maximum, $	Change
November	1.108	1.101	1.099	1.108	-0.6 %
December	1.102	1.104	1.102	1.108	0.25 %

EURUSD Technical Analysis

Let’s examine the daily chart of the EUR/USD pair to get an insight into the general picture of the market. The analysis takes into account the key support and resistance levels and employs the Pivot Point indicator and moving averages.

From a technical analysis perspective, the EURUSD currency pair is trading in a long-term uptrend, as evidenced by the current price of 1.1161, which is above the EMA 190. In addition, the pair is trading above EMA 21, confirming a short-term uptrend.

During the growth observed in September, the price exceeded the key high near 1.1202. Thus, the price highs and lows are increasing.

Let’s plot the Bull Power and RSI (14) indicators to the chart and identify the key support and resistance levels.

The Bull Power indicator is in the green zone, which confirms the strength of buyers. The RSI (14) is in the neutral zone, indicating both buying and selling opportunities. The nearest key support level is the September 11 low of 1.1000.

Based on the current market conditions, it is projected that if the price continues to rise and consolidates above 1.1200, the uptrend may continue towards 1.1450. If bears manage to keep the price below 1.1200, the pair may begin to decline and break through 1.1000. In this case, the uptrend will reverse. In this scenario, consider selling the pair until it reaches the next support level in the area of 1.0780.

EURUSD Analysis For Next Three Months

Let’s assess the daily chart of the EURUSD pair using the Ichimoku indicator.

The pair is trading above the green Ichimoku cloud, which indicates a long-term upward trend. The expansion of the Ichimoku cloud may indicate the continuation of the upward movement over the next three months. Additionally, the green cloud represents a bullish trend boundary.

The Tenkan line is trending upward, suggesting a short-term uptrend. The price is moving above the line. Based on the latest data, the growth will likely continue over the next few days. However, there is a strong resistance level at 1.1200, which has yet to be surpassed. It would be better to refrain from long trades near the resistance and wait until the price breaks through this level and consolidates above it before making purchases.

In addition, the Kijun line is directed upwards, indicating a medium-term uptrend. The price is currently above the line. The upward trajectory may continue for a few weeks, with 1.1200 representing a significant resistance level.

Both the Tenkan and Kijun lines serve as dynamic support levels. Consequently, a correction to these lines will allow traders to buy the euro with a target at the nearest resistance of 1.1200. Should the quotes break through the Kijun line from above and consolidate below this line, the price may face a downward correction over the next several weeks. In this case, the bearish target will be within the green Ichimoku cloud.

Long-Term EURUSD Technical Analysis for 2024–2025

In order to conduct a long-term technical analysis, it would be advisable to examine the weekly chart and apply the Ichimoku indicator, in addition to key support and resistance levels.

Following a significant decline that concluded in September 2022, the trading instrument entered a correction phase. As part of the correction in January-March 2023, the price tested the Ichimoku cloud and subsequently broke through it from below. As a result, the pair embarked on an upward trajectory.

In the fall of 2023, the price corrected to the uptrend boundary. The pair has yet to pierce it. Consequently, growth is projected to continue towards the July 2023 high near 1.1275.

In recent months, the Ichimoku indicator has formed a red cloud, which indicates a potential change in trend towards a downtrend. However, in July-August 2024, the price began to rise, and the green cloud began to emerge.

Therefore, the indicator confirms that the EURUSD pair is trading in a global uptrend and suggests the potential for continued growth. The next bullish target is 1.1275. Should the price remain above this level, the growth will likely continue towards 1.1495.

If the quotes remain below the key resistance level of 1.1275, bears may start a downward correction. In this scenario, the potential downside target would be the Ichimoku cloud, as well as support levels of 1.0610 and 1.0450.

It is essential to maintain the 1.1275 level and form a reversal Price Action pattern to initiate short trades. The sales target for the end of the year is 1.0862.

Month	EURUSD Projected Values
	Minimum, $	Maximum, $
2024
October	1.1040	1.1275
November	1.1150	1.1370
December	1.1275	1.1550
2025
January	1.1350	1.1570
February	1.1275	1.1500
March	1.1200	1.1500
April	1.1300	1.1595
May	1.1415	1.1688
June	1.1500	1.1766
July	1.1400	1.1800
August	1.1570	1.1900
September	1.1640	1.1780

Long-Term Trading Plan for EURUSD

Let’s draw up a long-term trading plan for the EURUSD pair.

• According to the conducted technical analysis, the EUR/USD pair is maintaining an uptrend.
• During the short-term uptrend, consider buying the euro at the nearest support levels of 1.1140 and 1.1108 with the target at 1.1200.
• When planning to trade over the next three months, an optimal strategy would be to await a substantial market correction to the 1.0996 or 1.0908 levels. In this scenario, consider purchasing the euro at these levels with a take-profit order set at 1.1275.
• The long-term trading plan suggests that the uptrend will continue with a target at the January 2022 high near 1.1495. Thus, bulls should push the price above the resistance level of 1.1275 to reach the projected target.
• In the long term, if the pair breaches 1.1495, it may soar to 1.1688. Should the price consolidate above 1.1688, one may consider long trades until the rate hits the level of 1.1900, representing the maximum growth target for the next 12 months. If so, the key resistance levels will offer support levels, at which long positions can be considered.
• The uptrend boundary is at the level of 1.0450. However, should the red Ichimoku cloud begin to form and the price break through it from above, the pair may continue to decline. In this scenario, long trades are out of consideration. Short trades may be opened with a target of 1.0610.

When engaging in long-term trading, it is essential to closely monitor economic data and political events in the United States. Remember that long-term forecasts are subject to change and may be revisited due to various factors.

EURUSD Rate Forecast for 2025 – Experts Predictions

The prevailing view among analysts is that the EURUSD exchange rate will strengthen in 2025. The most optimistic forecast indicates that the pair will close the year at 1.2133. However, despite anticipating growth, Long Forecast experts do not discount the possibility of a correction to 1.1260 by the end of 2025. Meanwhile, analysts at WalletInvestor project a decline to 1.0770.

Long Forecast

Price range in 2025: $1.0960–$1.1790 (as of 30.09.2024).

According to LongForecast, the EUR/USD rate is projected to reach new highs in 2025, with the first one touching in February near the level of 1.1510. Subsequently, a prolonged downward correction will start, and the price will likely reach 1.1130 in June. The growth will continue, and the quotes will hit another high in the area of 1.1700 in autumn. A correction will follow. The price is expected to end the year at 1.1260.

Despite significant drawdowns, investors will likely remain bullish. Against this backdrop, it is better to trade in the medium term and hedge positions in case of prolonged drawdowns.

Month	Open, $	Low–High, $	Close, $
January	1.144	1.115-1.149	1.132
February	1.132	1.132-1.168	1.151
March	1.151	1.121-1.155	1.138
April	1.138	1.120-1.154	1.137
May	1.137	1.119-1.153	1.136
June	1.136	1.096-1.136	1.113
July	1.113	1.111-1.145	1.128
August	1.128	1.128-1.178	1.161
September	1.161	1.145-1.179	1.162
October	1.162	1.116-1.162	1.133
November	1.133	1.100-1.134	1.117
December	1.117	1.109-1.143	1.126

PandaForecast

Price range in 2025: $1.1057–$1.2521 (as of 30.09.2024).

PandaForecast expects the EURUSD price to rise in 2025. The strengthening of the exchange rate will start in January, followed by a strong correction in February. The pair will showcase a robust uptrend in March and surge to 1.2133 by the year-end.

With this in mind, it is favorable to plan long-term trades, as well as to consider intra-week trading. Major corrections are also expected. In April, the price will hit a high of 1.1925 and in May, the low is expected to be around 1.1192.

Month	Average price, $	Minimum, $	Maximum, $	Volatility, %
January	1.1621	1.1314	1.1763	3.82 %
February	1.1241	1.1057	1.1335	2.46 %
March	1.1703	1.1522	1.2043	4.33 %
April	1.1728	1.1625	1.1925	2.52 %
May	1.1551	1.1192	1.1745	4.71 %
June	1.1793	1.1466	1.2189	5.93 %
July	1.1858	1.1683	1.2156	3.89 %
August	1.1997	1.1715	1.2395	5.49 %
September	1.2163	1.1954	1.2286	2.70 %
October	1.2128	1.1725	1.2362	5.15 %
November	1.1898	1.1594	1.2123	4.37 %
December	1.2133	1.1807	1.2521	5.70 %

WalletInvestor

Price range in 2025: $1.0710–$1.1040 (as of 30.09.2024).

The WalletInvestor portal forecasts a gradual decline in the EURUSD exchange rate in 2025. The pair will start the year at 1.1040, gradually declining through the projected period. By the end of the year, the price will reach the 1.0770 level. The monthly volatility will not exceed 1%. These are very insignificant indicators, more related to a global correction than to a pronounced market movement. Against this background, it will be profitable to consider selling the pair in the short term.

Month	Open, $	Close, $	Minimum, $	Maximum, $
January	1.104	1.098	1.097	1.104
February	1.098	1.090	1.090	1.098
March	1.091	1.098	1.091	1.099
April	1.098	1.100	1.098	1.101
May	1.100	1.092	1.090	1.100
June	1.092	1.092	1.092	1.096
July	1.092	1.100	1.092	1.100
August	1.100	1.093	1.093	1.100
September	1.093	1.089	1.089	1.094
October	1.089	1.081	1.081	1.089
November	1.081	1.073	1.071	1.081
December	1.074	1.077	1.074	1.080

Long-term EURUSD Predictions for 2026–2027

Analysts believe that the euro will smoothly decline against the US dollar in 2026–2027. However, experts differ in their opinion about the pace of the projected decline. By December 2027, the EURUSD price is expected to range between 1.0250 and 1.0300.

Long Forecast

Price range in 2026–2027: $1.0140–$1.2420 (as of 30.09.2024).

According to LongForecast analysts, EURUSD quotes are expected to grow in the first half of 2026. Since September, a rapid decline is expected. By the end of the year, the price will reach 1.1450. In 2027, analysts expect a decline. Thus, the rate will be 1.1450 in January and plummet to 1.0300 by December.

Month	Open, $	Low–High, $	Close, $
2026
January	1.126	1.126-1.166	1.149
February	1.149	1.098-1.149	1.115
March	1.115	1.115-1.150	1.133
April	1.133	1.133-1.178	1.161
May	1.161	1.114-1.161	1.131
June	1.131	1.130-1.164	1.147
July	1.147	1.147-1.197	1.179
August	1.179	1.179-1.232	1.214
September	1.214	1.206-1.242	1.224
October	1.224	1.175-1.224	1.193
November	1.193	1.156-1.193	1.174
December	1.174	1.128-1.174	1.145
2027
January	1.145	1.101-1.145	1.118
February	1.118	1.118-1.155	1.138
March	1.138	1.087-1.138	1.104
April	1.104	1.073-1.105	1.089
May	1.089	1.072-1.104	1.088
June	1.088	1.058-1.090	1.074
July	1.074	1.063-1.095	1.079
August	1.079	1.040-1.079	1.056
September	1.056	1.038-1.070	1.054
October	1.054	1.018-1.054	1.034
November	1.034	1.014-1.044	1.029
December	1.029	1.015-1.045	1.030

WalletInvestor

Price range in 2026–2027: $1.0160–$1.0770 (as of 30.09.2024).

WalletInvestor estimates that in 2026, the EURUSD pair will remain relatively stable within a narrow range of 1.0460–1.0710. While a clear trend is not anticipated, the price may decline to 1.0500 by the end of the year. Given these conditions, it would be advantageous to open positions at the range boundaries. At the upper boundary, it would be advisable to consider selling, while long trades can be considered at the lower boundary.

In 2027, the EURUSD market will continue to trade in a sideways trend without significant price swings. The monthly price change is not expected to exceed 1.00%. While unlikely, it is still a possibility. Nonetheless, it would be reasonable to exercise caution with regard to this forecast.

Month	Open, $	Close, $	Minimum, $	Maximum, $
2026
January	1.077	1.071	1.070	1.077
February	1.070	1.063	1.063	1.070
March	1.063	1.071	1.063	1.071
April	1.071	1.072	1.070	1.074
May	1.072	1.064	1.062	1.072
June	1.064	1.065	1.064	1.068
July	1.065	1.072	1.065	1.072
August	1.072	1.066	1.066	1.072
September	1.066	1.061	1.061	1.066
October	1.061	1.054	1.054	1.061
November	1.053	1.046	1.044	1.053
December	1.046	1.050	1.046	1.053
2027
January	1.049	1.043	1.042	1.049
February	1.043	1.035	1.035	1.043
March	1.035	1.043	1.035	1.044
April	1.043	1.045	1.043	1.046
May	1.045	1.036	1.034	1.045
June	1.036	1.037	1.036	1.040
July	1.037	1.044	1.037	1.044
August	1.044	1.038	1.038	1.044
September	1.038	1.034	1.034	1.039
October	1.034	1.026	1.026	1.034
November	1.026	1.018	1.016	1.026
December	1.018	1.022	1.018	1.025

Factors That Can Affect the EURUSD rate

The EURUSD exchange rate is the ratio of the EU and US currencies, the two largest economies in the world. Therefore, significant economic and political news from the EU and the US directly affect the EURUSD exchange rate. These factors of influence are called fundamental. Additionally, there are technical factors. Let’s examine both types in more detail.

Fundamental Factors

There are several important economic indicators for the US and EU. The most significant factors affecting the price of the pair include the following:

• The ECB’s and the Fed’s interest rate changes, GDP growth rates, and inflation indexes (CPI, PPI);
• Unemployment rate, US jobs data, Non-farm payrolls data;
• Industrial production (industrial production index);
• Retail sales, balance of trade, consumer confidence index, indexes of business sentiment (ISM, IFO);
• Speeches by top officials: press conferences with the ECB and Fed heads, and speeches and commentaries from leading EU and US politicians;
• Political events: various government reshuffles, elections, public unrest, internal political instability (e.g., Brexit);
• Force majeure: emergencies, natural disasters, man-made disasters, terrorist attacks, epidemics.

Technical Factors

The most significant technical factors influencing the EURUSD rate are the following:

• Current trend is an essential technical factor. In an uptrend, purchases are preferable; in a downtrend, sales are recommended. In a sideways trend (range), trading in both directions from the boundaries of the price range is appropriate.
• Historical highs and lows, as well as significant support and resistance levels on the price chart, are the key markers for analyzing and forecasting the future movement of the EURUSD pair.
• Various continuation or reversal patterns from classical technical analysis, candlestick patterns, and Price Action patterns.

The EURUSD Pair History

The euro was introduced in 1999 to replace the national currencies of EU countries, such as the German mark, the French franc, and the Italian lira.  Therefore, the euro is affected by macroeconomic statistics of the eurozone and individual EU countries’ performance.

The euro officially entered non-cash circulation on January 1, 1999, and banknotes and coins were brought into use on January 1, 2002. In terms of international settlements, only the US dollar surpasses the European monetary unit, making it the second most popular world reserve currency. When trading started, the exchange rate stood at 1.1800. The pair’s ticker on the currency market is EURUSD.

Since 1999, the EURUSD pair has undergone significant changes. In the first two years, the euro prospects were vague, as the exchange rate fell to the lowest value of 0.8200. After that, it increased over seven years to a record high of 1.6039 in 2008. In the following years, the pair corrected significantly due to the banking crisis and various problems in the eurozone. The asset traded in a bearish trend until April 2015, when it began to recover.

In terms of market sentiment, 2020 was a very representative year. When the first wave of the coronavirus hit in March, the market reacted strongly to the pandemic’s scale and impact. As a result, investors switched to the US dollar as a protective asset, leading to its strengthening. However, the situation changed when Pfizer announced promising vaccine news in early November. Consequently, the need for a safe asset diminished, causing the US dollar to depreciate.

In both cases, the market reaction was obvious, but this is not always the case. When the European Central Bank announced financial support packages in 2022 to combat the effects of the coronavirus, the market reacted positively. Investors believed that the ECB’s efforts to prevent business collapses and job losses were substantial, resulting in a strengthening of the euro.

The EURUSD’s growth in October 2022 was driven by a number of economic and political factors that affected the US dollar and the euro. The Fed has been aggressively raising interest rates in 2022 in an attempt to curb inflation. However, in the fall of 2022, the market began to expect the pace of rate hikes to slow for the first time as there were signs that inflation might be slowing. These expectations weakened the US dollar as investors suggested that the Fed may end the rate hike cycle sooner than previously anticipated. 

Some US macroeconomic data released in 2022 were weaker than expected. For example, employment and GDP data indicated a slowdown in economic growth. This weakened confidence in the US dollar and led to its depreciation against the euro.

The ECB also began raising interest rates to combat high inflation in the eurozone. In 2022, the ECB implemented a series of measures that strengthened the euro. Expectations of further rate hikes in Europe supported the euro’s growth against the US dollar.

Equity and other risk asset markets witnessed moderate optimism in 2022. The improvement in market sentiment has contributed to increased demand for riskier assets such as the euro and reduced demand for safe havens such as the US dollar.

The ECB’s economic measures aimed at supporting the economy and curbing inflation strengthened the single European currency. This appreciation continued until mid-2023, when the asset reached a high of 1.1255.

Despite investors’ hope that the Fed’s interest rate hike cycle would end as early as 2022, the first half of 2023 saw a rate hike to 5.50%. Higher interest rates make the US dollar more attractive to investors as they can get higher yields on their investments in US assets. This led to a strengthened US dollar and, consequently, a decrease in the euro price in the summer of 2023.

The economic performance in the eurozone in 2023 fell short of expectations. Sluggish economic growth, poor inflation control, and low rates of manufacturing activity led to a decline in investor confidence in the euro. For example, declining industrial production and slowing GDP growth indicated weakness in the eurozone economy.

The US economy demonstrated more robust growth compared to the eurozone economy. Strong US macroeconomic indicators, such as high employment and consumption growth, supported the US dollar while the eurozone struggled. This difference in economic outlook contributed to the depreciation of the euro against the US dollar.

Nevertheless, in 2023, the euro exchange rate did not weaken much but went into a downward correction, reaching 1.0460.

The first half of 2024 was marked by low EURUSD volatility. On the one hand, the euro was supported by the measures taken earlier by the ECB and the government to boost the economy. On the other hand, the US economy continued to show solid growth. The Fed interest rate remained at 5.50%, attracting investments in the US dollar.

In the second half of 2024, the EURUSD began to increase steadily on expectations about the reduction of the US Federal Reserve interest rate. The US regulator was delaying this decision for a long time, as inflation turned out to be stubborn. However, prices did start to decline from 3.5% in March to 2.5% in August on a yearly basis, the lowest level for the last three years. US inflation rate on a monthly basis is shown in the screenshot below.

At the meeting on September 18, 2024, the Fed slashed the interest rate by 0.5%, bringing it down to 5.00%. The US dollar responded with a sharp decline, allowing the EURUSD exchange rate to soar. In September, the pair reached its yearly high of 1.1214.

However, prospects for further growth are uncertain due to the fragility of the eurozone economy and weak data on the manufacturing and services sector in Germany and France. In addition, the ECB is expected to cut its interest rate in October. Investors project at least two ECB rate cuts in 2024. All of this may have a negative impact on market sentiment and limit the growth of the EUR/USD exchange rate to the 2023 high of 1.1275.

When making forecasts for EURUSD prices, it is important to pay close attention to political events. For instance, in the period preceding the US presidential elections, the volatility of the EURUSD exchange rate may increase significantly.

Is EURUSD Still a Good Investment?

From a technical analysis standpoint, the pair is still trading in a long-term uptrend. The short-term and medium-term trends are also upward, which continues to make investments in the EURUSD pair a relevant option. Should the euro receive further support, the pair is expected to reach 1.1495 by the end of 2024.

In September, the EURUSD pair approached the key resistance levels, the December 2023 high and the July 2023 high, in the area of 1.1145 and 1.1275, respectively. Notably, these levels have not yet been breached and could potentially act as roadblocks to further growth for the EUR/USD pair. Therefore, purchasing the trading instrument at current prices is a high-risk strategy. It would be better to wait for the quotes to breach these levels before considering new purchases.

Most forecasts indicate that the EUR may increase during the 2024 and 2025 periods. In the most optimistic scenarios, the target price is 1.2133. At the same time, a pessimistic outlook suggests that the growth is expected to continue to 1.1510, followed by a correction to 1.1260. Some experts anticipate a decline in the EURUSD rate.

Prior to making any trading or investment decisions on the EURUSD pair, it is essential to conduct a comprehensive analysis, study professional analytical reviews, and develop an accurate trading plan in accordance with risk and money management rules.

Price chart of EURUSD in real time mode

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