Euro Exchange Rate Today: EUR Forecasts Deteriorate as 1.355 breaks in EUR/USD, German ZEW Data Disappoints

By Rob Samson

"The EUR/USD broke down below key support at 1.3550 late in Friday’s North American session, turning the longer-term bias to the downside." - GFT's euro forecast.

The euro headed lower in mid-morning in London after it was shown the Eurozone ZEW Survey for Economic Sentiment (Jan) beat expectations coming in at 73.3, markets had priced in a rise to 70.2 from December's 68.3.

But, Germany has missed the mark and this should hamper any EUR gains. The German number came in at 61.7, below expectations for 64, and this is actually below December's 62. Losses are most acute against the GBP at present.

Euro exchange rates today

• The euro to pound sterling exchange rate (EUR/GBP) is 0.23 pct lower at 0.8229.
• The euro dollar exchange rate (EUR/USD) is 0.1 pct lower at 1.3538.
• The euro Aus dollar rate (EUR/AUD) is 0.18 pct higher is 1.5411.
• The euro NZ dollar exchange rate (EUR/NZD) is 0.06 pct up at 1.6295.

Note: Our EUR quotes are taken from the wholesale spot markets. Your bank will charge a spread at their discretion when passing on a retail rate. However, an independent FX provider is so well placed on the market that they are able to deliver you up to 5% more currency. Please learn more here.

Euro exchange rate action over the past 24 hours

According to today's euro exchange rate forecast note issued by Lloyds Bank Research, the Euro is unlikely to benefit from positive data surprises:

"There is less reason to see a positive impact on the EUR from positive Eurozone data this year, as the risk premium associated with the EUR has largely been unwound, as can be seen from the decline in cross currency basis.

"The decline in this fed through to forward points and was very supportive for the EUR last year, but there is much less reason to see upside pressure on the EUR from this source any more. With the ECB talking yields down, it is consequently hard to treat strong Eurozone data as particularly EUR positive from here, so risks from ZEW should be more to the EUR downside. Having said this, we wouldn’t expect any major impact, though we still see a slight downside bias for the EUR."

Forecast for euro dollar rates today

(For the latest calls on the euro sterling exchange rate please see here).

"All signals are in sell territory and spot closed below the 100‐day MA on Friday. Technically the currency is weak; with the next support level at 1.3500," says a currency forecast note from Scotiabank.

"The EUR/USD broke down below key support at 1.3550 late in Friday’s North American session, turning the longer-term bias to the downside. So far this week though, the pair has recovered back up to test the 1.3550 level once again as traders look ahead to a low liquidity U.S. session due to the bank holiday. We maintain a neutral bias for today, and will watch for a bearish candlestick pattern to signal a possible shift from buying to selling pressure," says Matthew Weller, technical analyst at retail trading provider GFT.

ICN Financial say:

"The pair is trading below Linear Regression Indicators and the broken support that turned to resistance residing currently around 1.3625. Stability below the referred to levels is negative and might extend the bearish correction. Stochastic is showing o positive crossover at oversold signals, whereas the pair has to consolidate below 1.3520 represented in 61.8% correction shown on graph to cancel the possibility of being affected by the oversold signals.

"Anyhow, we will count on 1.3665 to keep our negative expectations. But today we will count on stabilising below the broken support that turned to resistance around 1.3625."

Sean Lee at FXWW gives a snapshot of some key levels to be aware of regarding future Euro direction:

For EUR/USD, "solid technical support held yesterday at 1.3510/15 but the bounce has been fairly timid so far; EUR/JPY neckline support held near 140.40 but a break below will lead to heavy long-liquidation; EUR/AUD is overbought in the short term, in my view, after reaching ‘neutral’ levels at 1.5500; EUR/GBP is in a downtrend, the market sentiment is bearish, and players are looking for more reasons to sell. If 1.3500 breaks then I see EUR bearish momentum increasing significantly."