Euro exchange rates: EUR outlook improves, but EUR/USD at 1.3740 is likely to be difficult to break
- Written by: Gary Howes
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Euro exchange rates are today under pressure as volatility in global markets spikes making for interesting trading conditions however the outlook against the US dollar is positive.
A look at the foreign exchange markets at mid-morning in London shows the euro under fresh selling pressure against sterling, however gains against the under-pressure US dollar have been achieved:
- The euro dollar exchange rate (EUR/USD) is trading 0.07 pct higher at 1.3687.
- The euro pound exchange rate (EUR/GBP) is trading 0.3 pct lower at 0.8275.
- The euro Australian dollar (EUR/AUD) rate is 0.31 pct lower at 1.5703.
Be Aware: All EUR quotes are taken from the inter-bank markets. Your bank will deliver your currency after levying a spread on the rate. However, an independent FX provider will guarantee you a more competitive spread, thus delivering up to 5% more currency. Please learn more here.
Today's euro outlook is dominated by the IFO survey which will attract some attention, but this has diminished in importance of late and in the current markets is unlikely to be the major focus.
"The EUR traded strongly towards the end of last week, helped partly by the strength of the Eurozone PMI data, but also by the weak sentiment surrounding emerging markets following the weaker Chinese PMI," note Lloyds Bank Research in a foreign exchange note to clients.
Outlook for the euro improves vs the US dollar
As mentioned, gains are being seen against the USD, and the outlook for the euro has turned more positive, as relayed by Ipek Ozkardeskaya at Swissquote Bank:
"EURUSD consolidated gains above the 21-dma (1.3643). Trend and momentum indicators improved; the MACD stepped in the green zone.
"We revise our tactical view to positive for a daily close above 1.3580. While some selling interest remains at 1.3635/50 area, option bids trail above 1.3700 for today’s expiry."
Lloyds Bank say the current volatility being witnessed in global FX are likely to play into the hands of the EUR:
"The large Eurozone current account surplus continues to underpin the EUR, especially when there is little risk appetite and speculative positioning is unwound, so if the market volatility and nerves seen on Friday continue, the EUR is likely to remain well supported."
Having said this, Lloyds suggest that the Friday high in EUR/USD at 1.3740 is likely to be difficult to break, and current levels are likely to prove a good selling opportunity if risk positive sentiment returns.
