Euro to Dollar (EUR/USD) Forecast for 2023, 2024-2025 and Beyond

In the world of Forex trading, few currency pairs command as much attention as EUR/USD. This major currency pair is not only among the most traded in the Forex market but also serves as a barometer for global economic sentiment. Traders and investors worldwide look to predict the future price of EUR/USD, not merely to make successful trades, but also to gauge the relative strength of the European Union and the United States economies.

Predicting the long-term trajectory of EUR/USD can be a challenging task, given the multitude of factors that influence its rate. These factors include interest rate differentials, inflation, employment data, trade balances, and capital flows. Additionally, unforeseeable ‘event’ risks can introduce unexpected volatility into the market. In this comprehensive analysis, we will delve deeper into the Euro to Dollar forecast, incorporating both fundamental and technical perspectives.

Major Takeaways

Let’s start with the major takeaways:

1. In the medium term, most analysts anticipate the EUR/USD to reach 1.15 by the end of 2023.
2. If an optimistic scenario unfolds, the rate may even surge to 1.296 before 2027. However, it’s crucial to note that the euro’s price might dip below $1 during corrective phases.
3. The EUR/USD’s remarkable liquidity makes it an ideal instrument for speculative trading, despite occasional drops during market instability.

EUR/USD Current Rate

At the time of writing, the current rate of the EUR/USD pair stands at $1.06376. This real-time rate reflects the dynamic nature of Forex trading. The EUR/USD pair is traded under the Forex ticker EUR/USD and belongs to the major currency pairs, known for their high liquidity. This currency pair comprises two of the world’s primary reserve currencies, the USD and EUR, and accounts for approximately 20% of total Forex market volume.

The EUR/USD pair exhibits certain characteristics worth noting:

• Active trading hours: This currency pair is traded around the clock, five days a week, with peak activity during European and American trading sessions.
• Volatility: EUR/USD is characterized by medium volatility. While it can experience substantial movements during significant news releases, its average daily volatility hovers around 80 pips.
• Low spread: Due to its high liquidity, EUR/USD boasts one of the lowest spreads, typically less than 1 pip on popular ECN accounts.

The Dollar in 2023: More Predictable?

The performance of the US dollar in 2023 has been influenced by various factors, including domestic policies and global economic dynamics. Under President Joe Biden’s administration, the US dollar has exhibited lower volatility in world markets. Biden’s focus on domestic issues and constructive trade negotiations have eased market tensions, reducing the demand for the USD as a safe-haven currency.

Furthermore, the massive US stimulus plan launched by President Biden has contributed to the US economy’s recovery from the COVID-19 pandemic, albeit with an expanded budget deficit. The Federal Reserve’s commitment, expressed by Chairman Jerome Powell, not to raise interest rates until the end of 2023, has further impacted the greenback.

Additionally, countries like China, South Korea, and Taiwan have successfully managed the pandemic and resumed economic growth, diverting investors towards riskier markets. These developments have added complexity to predicting future USD movements in Forex markets.

Forecasts for the USD’s future trajectory vary, but overall, market sentiment appears promising. Many traders are eyeing long-term positions, their duration contingent on the currency pair’s popularity.

Technical analysis plays a pivotal role in forecasting. Analysts and major analytical firms employ an array of tools, such as moving averages, oscillators, and pivot points, to assess historical data and extrapolate future market trends. This analytical approach empowers investors to make informed trading decisions.

EUR/USD Technical Analysis

Conducting a realistic EUR to USD forecast entails a thorough technical analysis across different timeframes. Let’s initiate this analysis by examining the monthly chart, where increased market sentiment typically augments optimism regarding the EUR/USD outlook.

To perform a comprehensive technical analysis, we employ a range of indicators, including moving averages with periods of 20, 50, 100, and 200, oscillators like RSI, stochastic, MACD, CCI, and various pivot point methods (classic, Fibonacci, Camarilla, Woody, etc.). These tools enable us to identify trends, support and resistance levels, and potential overbought and oversold zones. Their application significantly enhances the accuracy of currency forecasting in Forex.

Historical data reveals distinct patterns within the EUR/USD pair:

• After surging to 1.6 in April 2008 amidst a crisis, a clear downtrend (represented by the red line) emerged, punctuated by periodic corrections. This downtrend persisted until 2015 when EUR/USD entered a long-term channel with a lower boundary around 1.04 and an upper boundary near 1.23. This development emboldened traders and yielded profitable investment opportunities.
• Subsequently, after significant political events in February 2022, EUR/USD broke free from this channel’s lower border, affecting market dynamics and trading volume percentages. In 2023, the pair re-entered the channel, indicating potential upward movement, possibly reaching 1.25 by December.

Additionally, examining the price chart unveils intriguing patterns, such as a narrowing price triangle until 2015 followed by a descent. Subsequently, the chart depicts a period of sideways movement until 2017, after which each new correction has been deeper than the previous one. This pattern underscores the high likelihood of reaching 1.25, with the potential for further surges to 1.30 within the next two years. These factors collectively affirm traders’ prospects and offer additional opportunities for successful Forex trading and investment.

Euro/Dollar Weekly Price Forecast as of 25.09.2023

In the most recent week, the EUR/USD price sustained its downward trajectory, descending below the September 14th low. The next downside target now lies within Target Zone 1.0507 – 1.0488.

Relevant strategies for traders include considering new sell trades during corrections to resistance points (A) at 1.0826 – 1.0806 and resistance points (B) at 1.0931 – 1.0902. The first Take Profit level may be set at the low point of the preceding week.

A pivotal moment emerges if the trend’s key resistance at 1.0931 – 1.0902 is breached. Such an event would indicate a shift in the medium-term trend towards an upward trajectory, warranting consideration for EUR/USD buy positions.

EUR/USD Trading Ideas for the Week

To assist traders, we offer the following trading ideas for the week:

1. Sell according to the pattern at resistance (A) 1.0826 – 1.0806. Take Profit: 1.0620. Stop Loss: adhering to pattern rules.
2. Sell according to the pattern at resistance (B) 1.0931 – 1.0902. Take Profit: 1.0620. Stop Loss: according to the pattern rules.

It’s crucial to note that this technical analysis, based on margin zone methodology, is presented independently by analyst Alex Rodionov.

EUR/USD Current Rate in the Forex Market

As of the time of writing, the EUR/USD exchange rate stands at EUR/USD = $1.0638. Traders can access real-time data to make informed decisions in the global foreign exchange market.

EUR/USD Price Prediction for Next Three Months

For a more comprehensive forecast, let’s extend our technical analysis to the weekly chart and incorporate the MACD indicator for additional insights.

The chart above demonstrates a robust divergence between the MACD indicator and the price over recent months. MACD moving averages currently exceed the price level, implying a potential rise to 1.17. A noteworthy support level is established at the lower boundary of the local channel, approximately at level 1.05.

A significant development hinges on the price breaching the upper boundary of the channel and surpassing it in early August. This shift would be confirmed if the MACD line crosses above the signal line from below. In such a scenario, EUR/USD would likely embark on an upward trajectory over the following month.

What Will Be the Price of Euro in 2023?

To formulate a Euro to Dollar forecast for the next six months, we’ll utilize Bollinger Bands on the chart to analyze historical price trends.

A holistic examination of market potential and Bollinger Bands’ dynamics in response to varying market conditions suggests that over the next 12 months, the EUR/USD rate may fluctuate within the range of 1.04 – 1.24. Growth towards the upper channel boundary is expected to be marked by volatility, interspersed with short-term corrections that precede further upward momentum. This trend is reminiscent of the EUR to USD chart’s movement from May to November 2022, when the price broke below the channel’s lower boundary, subsequently rebounding to re-enter the channel by year-end.

Anticipate at least one substantial correction in August (or September) 2023. The potential target for this local bullish trend is $1.25, representing the upper boundary of the multi-year trading channel.

Monthly EUR/USD Price Forecast for 2023–2024

Building on the preceding EUR/USD prediction, let’s construct expected trading ranges for each month in 2023/2024. The table below outlines projected market lows and highs for the specified period, as derived from the EUR/USD forecast chart:

Long-Term EUR/USD Trading Plan

When engaging in Forex trading, a myriad of tools are available to facilitate market analysis and informed trading decisions. Here are some fundamental aspects to consider:

1. Charts and Technical Analysis

Price charts equipped with various indicators enable traders to evaluate market conditions, identify support and resistance levels, and discern entry and exit signals.

2. Fundamental Analysis

Staying abreast of economic news, geopolitical developments, and macroeconomic indicators is crucial. Understanding the factors influencing the economies of the currencies being traded is pivotal for evaluating long-term market trends.

3. Indicators

Leveraging technical indicators like moving averages, stochastics, RSI, MACD, and others can assist in recognizing overbought and oversold conditions in the market, as well as potential trend reversals.

4. Technical Analysis Patterns

Price patterns, such as zigzags, triangles, and chart formations, can serve as valuable entry and exit signals while also helping to determine stop-loss levels.

5. Economic Calendar

Monitoring economic events via a calendar is essential to be aware of forthcoming significant news releases that may impact exchange rates.

When crafting long-term investment strategies, remember the following factors:

• Targets and Strategy: Define your trading targets and choose an appropriate trading strategy that aligns with your objectives.
• Risks: Determine your acceptable level of risk for each position and adhere to prudent risk management practices. The 2% rule is a useful guideline: never risk more than 2% of your deposit on a single trade.
• Money Management: Allocate your capital into various segments and calculate the optimal trade size based on risk.
• Stop Loss and Take Profit: Implement stop-loss and take-profit orders for every trade to protect your capital and secure profits.
• Constant Monitoring: Continuously monitor market developments, adhere to your trading plan, and adjust your strategy if the situation changes.
• Trading Psychology: Emphasize emotional control, avoid impulsive decisions driven by fear or greed, and maintain discipline and patience in executing your long-term trading plan.

Incorporate these elements into your risk management practices and investment approach to optimize your long-term trading strategy.

Analytical Agencies’ EUR/USD Forecast for the Rest of 2023

Several analytical agencies and institutions have presented their EUR/USD forecasts for the remainder of 2023, offering diverse perspectives rooted in their assessments of the current market landscape:

Bloomberg: Bloomberg anticipates the EUR/USD exchange rate to reach 1.15 in the third quarter of 2023, climbing further to 1.18 in the fourth quarter, reflecting an optimistic outlook.

Morgan Stanley: Morgan Stanley notes that foreign investors have displayed a strong appetite for US dollar-denominated assets due to attractive yields and robust capital markets. This demand is expected to strengthen the dollar through year-end, with a projected EUR/USD rate of 1.15, revising their earlier forecast of 1.08.

Bank of America: Bank of America holds an upbeat outlook, forecasting the euro’s appreciation against the dollar in 2023. Analysts expect the EUR/USD rate to reach 1.10 by year-end, with a further increase to 1.15 by the close of 2024.

Deutsche Bank: Deutsche Bank predicts a weakening US dollar in 2024 and 2025, envisioning a EUR/USD rate of 1.15 by the close of 2023 and the potential for it to rise to 1.20.

Investing: Analysts at Investing company suggest that if US inflation indeed declines from 4% to 3.1% annually, the Fed may get closer to its 2% inflation target. In such a scenario, the greenback could come under pressure, potentially allowing the euro to continue its recovery and exceed 1.1100.

Trading Economics: According to global macro models and analyst expectations at Trading Economics, the EUR/USD exchange rate is anticipated to trade at 1.11 by the end of the current quarter. Looking ahead, experts project it to reach 1.05 in 12 months.

Long Forecast: Long Forecast envisions a bullish market trend for EUR/USD in 2024, with the exchange rate poised to reach heights previously recorded in 2014, 2016, and 2018.

While these forecasts offer valuable insights, it’s essential to remember that the foreign exchange market is influenced by a multitude of variables, and actual outcomes may diverge from these predictions. Therefore, traders and investors should exercise diligence, conduct thorough research, and remain adaptable in their strategies to navigate the dynamic currency market successfully.

In conclusion, the EUR/USD forecast for the coming months and years is influenced by a complex interplay of economic, geopolitical, and market factors. By considering these factors and adopting a well-informed, disciplined, and adaptable approach, traders can position themselves for success in the ever-evolving foreign exchange landscape.