In the European market, the euro initially rose to 1.0571. However, as U.S. long-term interest rates increased, EUR/USD dropped to 1.0533. When the New York market opened, U.S. long-term interest rates decreased, causing the euro to rise again. With some positions being reversed, EUR/USD climbed to 1.0606 at the close. Since the “Trump Trade” began on the 16th, strong buying of the dollar has caused the euro to drop nearly 450 points. The recent rise in EUR/USD seems to be a correction of this move. However, concerns about weak economic performance in Europe, including Germany, have increased expectations that the ECB will continue to cut interest rates. Meanwhile, the strong U.S. economy continues to support the U.S. Federal Reserve’s policy, creating a gap between the two central banks. This has kept the euro in a bearish trend. As buying pressure from the correction fades, EUR/USD is expected to face further downward pressure.
EUR/USD Forecast Range: 1.0620 (38.2%) – 1.0560
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