EURO/ USD Overview

With the last month of Q3 upon us and well on the way to Q4 the analysts at PathFinder FX look at the EURO and USD currency pair to see what potentially lies ahead for the EURO.

Key EURO Dates for the Diary

Start	Name	Impact	Currency
14/09/2023 12:15	ECB Monetary Policy Decision Statement	HIGH	EURO
14/09/2023 12:15	ECB Rate On Deposit Facility	HIGH	EURO
14/09/2023 12:15	ECB Rate On Main Refinancing Operations	HIGH	EURO
14/09/2023 12:45	ECB Press Conference	HIGH	EURO
22/09/2023 08:00	HCOB Composite PMI	HIGH	EURO
22/09/2023 08:00	HCOB Manufacturing PMI	HIGH	EURO
22/09/2023 08:00	HCOB Services PMI	HIGH	EURO
29/09/2023 09:00	Core Harmonized Index of Consumer Prices (MoM)	HIGH	EURO
29/09/2023 09:00	Core Harmonized Index of Consumer Prices (YoY)	HIGH	EURO
29/09/2023 09:00	Harmonized Index of Consumer Prices (MoM)	HIGH	EURO
29/09/2023 09:00	Harmonized Index of Consumer Prices (YoY)	HIGH	EURO

EUR/USD

Looking at the overall price action chart for the EURO from its markets entry in 1999 to date, the all-time high hit for EUR/USD in July 2008 was 1.604.

Since that market high EUR/USD has been following a steady downward trend with no potential signs of a trend reversal any time soon. Price currently heading towards a key level of support in 2015 to 2017 which was broken in 2022 and is now back as a level of support.

If this gets broken again, EUR/USD could potentially head back to the 2022 level of support of 0.95.

To see a trend, reversal price would potentially need to hit 1.04 and bounce back up out of the downward blue trend line to indicate a new trend cycle for the upside for EUR.

We could see price have a short-term run on the upside, from its current price of 1.07, rising towards the blue downward trend line. This gives the potential to hit the 1.138 area and be rejected, continuing to follow the blue trend line which would see EUR/USD at 1.04 in early 2028, barring any black swan events in between now and 5 years time.

Current Years Cycle

Looking at the price action of the weekly candle EUR/USD is a slight upward trend with 1.13 the year high in July with a pull back down towards 1.08 in August. If we see a break through the bottom trend line this could signal the end of this up trend and could see price continue fall to towards1.07 by the end of 2023.

However, if price bounces off the bottom line and back towards the top line we could see EUR/USD continue to trend upwards 1.15 to end the year.

Q3 into Q4

As we head towards the end of Q3 and into Q4 EUR/USD looks to be in an interesting position. EUR/USD current 4-hour trend is showing a continued downtrend off Q3s high of 1.1271 in mid-July. This has lead to downward trend with the potential for price to continue to fall towards1.07 as we head into Q4. Price would need to break out of this downward trend line to show a reversal back towards the upside. Failure to break out of this could lead to the further downside through Q4.

Our Comments

There is no clear telling which way the market will go particularly in the short term. With so many economic factors to consider, how the US performs compared to the European block is going to ultimately give the clearest indication of where the market is going in the short term.

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