Euro Exchange Rate Today: EUR Sent Tumbling Against Both USD and GBP
- Written by: Gary Howes
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Euro Rate Today: EUR/USD continues to trade within a 1.3700-1.3780 range, FX markets may prefer to stay on the sidelines ahead of key inflation data.
UPDATED: With no major Eurozone or U.S. economic reports scheduled for release today, the outlook for the EUR/USD hinges entirely on risk appetite and with today's poor market conditions the currency is feeling the heat. The surprise increase in U.S. new home sales could lend support to equities.
Things are likely to heat up further over the next two days with key inflation numbers due out over the next two days. "Germany CPI ‘flash’ estimate for February will be released tomorrow ahead of the aggregate Eurozone print on Friday. These will be key in determining EUR sentiment and market expectations ahead of next week's ECB meeting," says a note issued by Lloyds Bank Research.
A look at the euro exchange rate complex today shows:
Outlook for the euro dollar exchange rate
UBS are optimistic the EUR can eke out further gains against the US dollar in coming sessions: "With bullish conditions in place, there’s scope for a test of critical resistance at 1.3836. A break above which would open 1.3893. Support is at 1.3660 ahead of 1.3590.
UniCredit Bank say: "EUR-USD is still struggling between 1.37 and 1.3750 with no great momentum in either direction. A moderation in US new home sales today is unlikely to spark a heavy rally above the next resistance level at 1.3750."
"Some more trading at 1.37 looks probable this morning, especially with German data failing to trigger much strengthening in the single currency. It is likely that poor data in the US will provide the euro with some support, but not enough to breach the 1.38 mark.
Another day of sideways trading is on the cards. The euro has recovered some ground this morning, so we may see the currency hold up well during today’s session," says Sasha Nugent at Caxton FX.
Outlook for the euro pound exchange rate
According to UBS, "the EUR/GBP cross remains vulnerable as bearish conditions persist. Fresh selling materialised earlier on Monday after testing resistance at 0.8277. Support is at 0.8215 ahead of 0.8158. Next major resistance is at 0.8350."
The team at MIG Bank say:
"EUR/GBP is grinding lower after Monday's intraday bearish reversal. The breach of the rising channel favours a test of the support at 0.8215. An hourly resistance stands at 0.8267.
"In the longer term, the technical structure remains negative as long as prices remain below the resistance at 0.8350 (13/01/2014 high).
Monitor the support implied by the 61.8% retracement (of the 2012-2013 rise) at 0.8160. Another key support can be found at 0.8082 (01/01/2013 low)."
The US dollar
US confidence indicators came in weaker than expected yesterday, continuing the recent run of soft US data releases. However, the USD held firm suggesting softer weather-affected data is having less impact on the market.
The market will likely remain cautious as to how much of the weakness is weather related but will likely wait till US payrolls next week before questioning whether this is a genuine slowdown.
"With little on the calendar today and EUR/USD still struggling to break through the 1.3770/80 area, we expect the USD index to see good support around the 80.00 level," say Lloyds Bank Research.
