EUR/USD - What's in store for JUNE ??

31 mag

As of May 2024, the EUR/USD currency pair is experiencing a cautious and somewhat bearish sentiment 📉. May has also historically been a weak month for the EUR/USD pair, with average returns of -0.62% since the end of the Bretton Woods system. This seasonal trend appears to be continuing, as the euro has struggled to maintain momentum against the dollar.

My personal view is that we will see the price continue to drop going into June next week. However, if we break through the resistance level, we could see significant EUR strength 💪.

Currently, the euro is facing several challenges that are impacting its value against the US dollar. Here are a few key points summarizing its current state:

🔸 Weak Sentiment and Technical Resistance: The euro has recently slipped below the 1.10 level against the dollar, a significant technical resistance point. This drop reflects a broader risk-off sentiment in financial markets, where investors are cautious and less willing to take on risk​.

🔸 Historical Weakness in May: Historically, May has been a weak month for the euro, with an average return of -0.62% against the dollar since the end of the Bretton Woods system. This seasonal trend has continued, adding downward pressure on the euro this month​​.

🔸 Strong US Economic Data: The dollar has been bolstered by stronger-than-expected US economic data, particularly in employment and inflation. This has led to a reassessment of expectations regarding Federal Reserve interest rate cuts, which were initially anticipated to be more aggressive​.

🔸 Geopolitical Tensions: Ongoing geopolitical tensions, including issues in the Middle East, have contributed to market volatility and a general flight to safety, benefiting the dollar as a safe-haven currency at the expense of the euro​.

🔸 Interest Rate Expectations: The recalibration of interest rate expectations has played a crucial role. Investors are now more skeptical about significant rate cuts from both the European Central Bank (ECB) and the Federal Reserve, supporting the dollar and weighing on the euro​​.

For education purposes**

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