Our EUR/USD price forecast is bearish for the near term, as the price has failed to gain strength above $1.078 level. This price level was a June 2022 high which was broken in January 2022. However, the EUR to USD pair weakened a lot in February and closed the month with a 2.68% loss.
On Friday 3rd, March 2023, EUR/USD showed minor gains after closing the previous day in the red. Till press time, the pair was trading at $1.0614 after gaining 0.16% during the London session. On a medium timeframe, the price still appears to be maintaining its local uptrend.
For the last year, EUR to USD pair has been facing intense sell pressure due to very high interest rates in the US. The ongoing war tanked the pair even lower and took it to $0.953, the lowest level in 19 years. However, the pair has shown a massive rebound in 2023 and now trades much higher.
On Friday, EUR/USD pair is expected to show increased volatility amid the release of European PMI numbers. The finalized PMI of Germany and France will be more important than the service sector PMI for Italy and Spain. On a higher timeframe, the pair will likely remain volatile as the March FOMC meeting in the US approaches.
Since the start of February 2023, EUR to USD pair has constantly been tumbling. The reason behind this downtrend is the rising DXY index. The hawkish Fed comments and an unexpected increase in the PCE core inflation has triggered a rebound in DXY. This has strengthened the dollar as compared to its European counterpart and a basket of other currencies.
If the bounce in DXY continues, then EUR/USD price forecast can turn very bearish. A 50 points rate hike in the March FOMC meeting can send the pair to rates the 200-day moving average that currently lies at $1.033. This will be a 2.6% decrease from the pair’s current level.
This post was last modified on %s = human-readable time difference 12:18