For starters, let’s talk about the pair before we get into how we do the forex forecast for it. The EUR/USD pair is widely known as the Euro and Fiber, respectively. There are several reasons why we call the USD Fiber sometimes, but they are not worth exploring here.
What’s essential in EUR USD Forecast is that the Fiber belongs to a group of currencies we call the majors. Among the major six pairs, we have AUD/USD, USD/CHF, GBP/USD, USD/JPY, and USD/CAD.
The USD is the most traded and widely held currency. EUR is the second most popular in the world. With the EUR/USD, we are talking about two major economies of the world (the European and American markets.)
For this reason, the EUR USD Forecast has to take into account that this pair has more than half of the trading volume in the FX market. So, what are the key factors that affect this currency? We have cursorily mentioned EUR USD News. However, there are more factors we should explore briefly.
The first key factor in the EUR USD Forecast is sessions. When you are a trader, it is always good to know the time when the EUR/USD pair has the highest volatility and when it is not traded as much. During the Asian session, for example, the EUR/USD is traded less.
The reason for this is that the essential information we use for the EUR USD Forecast usually comes to us during the US and European sessions.
At around noon, the activity slows down, because traders are usually going out for lunch, and rises again when the US session begins. The market’s liquidity plummets at around 5:00 GMT when the European traders close their positions.
Knowing necessary information like this is what allows us to be the best option when you are looking for EUR USD Forecast information.
In doing the EUR USD Forecast, you need to be plugged into the EUR USD News pipeline to get information about what the central banks are doing. They are the most important financial institutions that affect the EUR/USD pair.
To be specific, the two central banks affecting the pair are the European Central Bank, under the leadership of Christine Lagarde (formerly of the International Monetary Fund) and the Federal Reserve, under the guidance of Jerome Powell.
These figureheads make the EUR USD News by regulating things like money supply, monetary policy, interest rated, and the strength/weakness of their respective currencies. To make EUR USD Forecast, we follow all meetings of the central banks; listen to speeches/press releases, and all the changes these people might make.
What they do creates volatility, and it falls to us to keep up with that to ensure better EUR USD Forecast.
Any EUR USD News of a political nature can affect the pair. Trump’s impeachment, the Brexit debacle, that time Greece’s economy turned into the equivalent of a goat dancing around an open fire and other moments, have all factored into our EUR USD Forecast.
Sometimes, politicians say things that could affect the value of a currency. For example, not too long ago, Steven Mnuchin, the US Treasury Secretary, said that ‘a weaker dollar is good for the US.’ Immediately after this, the USD fell.
EUR USD News is made by politicians most of the time, and we keep our eyes on them. In a market where the words of one man can shift the value of currency almost immediately, it helps to know when they say something and get ahead of the news to ensure that the EUR USD Forecast we make it practical and accurate.
Every week, our EUR USD Forecast from the data we get from economic calendars. The most crucial information we take from the reports helps us become even more accurate. We have talked about how the central banks and monetary policy affects.
There is one crucial thing that we also look into; consumer price index (CPI). The CPI is a measure of inflation and is the most vital indicator of an economy’s health. We also look at the GDP, which is another indicator that helps make our EUR USD Forecast accurate.
Included in the data is PMI (Purchasing Managers’ Index), another indicator of economic health. A survey like this one helps us know whether purchasing managers show optimism or pessimism regarding their economy in the medium-term.
The importance of this survey in the EUR USD Forecast cannot be understated because central banks use it too when crafting monetary policy. The reports are an augmentation of EUR USD News, to help us make sure that we have all the angles of a story before we can come up with a EUR USD Forecast.
In learning about forex, you might have heard that, in theory, there is a direct correlation between interest rates and exchange rates. We call this the ‘International Fisher Effect.’ In many cases, the currency rises and falls with the interest rates of an economy.
In the case of the EUR USD Forecast, a prime example would be the US interest rates, which are higher than the EU ones. This means that the US dollar strengthens when compared to the Euro. If you flip this and make the EU interest rates higher, they will strengthen, when compared to the dollar.
In summary, the EUR/USD pair is a major pair because it brings together two major economies. If traders want to get the best EUR USD Forecast with the most accuracy, we offer great options, because we take into consideration all the factors.
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