EUR/USD: Understand the euro/dollar trend in the coming months

What’s happening with the EUR/USD pair now?

If you follow the forex market, you’ve probably heard of the EUR/USD. This pair represents the relationship between the euro and the US dollar, being the most traded globally. But after all, why pay attention to it now?

The reality is that the EUR/USD experienced a relatively stable period in 2023, stuck within a narrow trading range. This happened due to global economic uncertainty and divergent monetary policies between America and Europe. Since the beginning of 2024, however, the scenario has changed. Volatility has increased significantly, and euro/dollar trends have started to become more interesting for market traders.

Currently quoted around 1.0743 (June 2024), the pair fluctuates between forecasts of a rise to 1.128 and a fall to 1.094. This range of movement reflects the uncertainties and opportunities surrounding the European and American currencies.

Reading technical signals: what do the numbers reveal?

Technical analysis offers clues about where the EUR/USD might move. Using indicators like moving averages, RSI (Relative Strength Index), and MACD, it’s possible to identify patterns.

Moving averages (except for the 100-day moving average) consistently point to sell signals, suggesting downward pressure. The RSI is around 45, indicating a neutral state, with no decisive strength in either direction. Meanwhile, the MACD remains in negative territory, reinforcing the thesis of a possible continuous decline.

These combined indicators suggest a moderate downward trend for the coming months. But here’s the important detail: technical analysis alone doesn’t paint the full picture.

The factors behind the scenes: fundamental analysis

While charts tell one story, economic numbers tell another. The behavior of EUR/USD heavily depends on decisions by the European Central Bank (ECB) and the Federal Reserve (Fed).

The ECB is considering a more aggressive stance with interest rate cuts in 2024, which could boost the European economy but weaken the euro in the short term. On the American side, the Fed maintains its position of raising rates to contain inflation, making the dollar more attractive to international investors.

Beyond monetary policies, there are economic indicators worth paying attention to:

• GDP: If the eurozone shows strong growth, the euro gains strength. Conversely, robust employment data in the US favors the dollar.
• Inflation and unemployment: European CPI and US unemployment rates directly influence central bank decisions.
• Bond yields: High yields on US Treasury bonds continue to attract global capital to the dollar.

This balance of forces makes EUR/USD a stage of moderate volatility, creating constant opportunities.

Why does EUR/USD attract traders and investors?

There’s a reason so many focus on this pair. First, it is highly liquid – being the most traded in the world, you can enter and exit positions with spreads much smaller than other pairs.

Transparency is also a key advantage. European and American markets are strictly regulated, offering security in transactions. For those looking to diversify their portfolio, EUR/USD is perfect. You hedge against local fluctuations by maintaining exposure in two of the largest economies.

Another point is reduced operational costs. Unlike stocks or commodities, the forex market allows operations with smaller margins, making it more accessible even for beginners. And we can’t ignore arbitrage opportunities – constant volatility offers chances for short-term strategies.

How to navigate this market safely?

Trading EUR/USD is profitable but requires strategy. Here’s the essential checklist:

Real analysis: Don’t rely on just one approach. Combine technical and fundamental analysis to form a complete view of where the pair is heading.

Stay updated with news: Central bank decisions, economic policy changes, major elections – all influence EUR/USD. An economic news feed is your best friend.

Loss protection: Always set stop-loss orders. If the market moves against your expectations, you know exactly your loss limit.

Never put everything in one place: Your exposure to EUR/USD should be part of a broader diversification strategy with other pairs and assets.

Should you invest in EUR/USD now?

The answer is: it depends. EUR/USD remains one of the most predictable assets in fundamental terms, but technically it signals caution. The coming months promise movement, which could mean gains – if you’re prepared.

The euro/dollar trend in the next months will point to adjustments in central bank policies. Staying informed about these movements is more important than making impulsive decisions based on charts.

With proper analysis, smart risk management, and a well-defined strategy, trading this pair can generate significant returns. The secret is to study before investing and never risk more than you can afford to lose.