CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open an account
✖

EUR/USD, Oil Forecast: Two trades to watch

Article By: ,  Senior Market Analyst
Yesterday 10:46 AM

EUR/USD rises but the outlook remains weak

  • France's government is on the brink of collapse
  • US JOLTS job openings are due
  • EUR/USD recovers from 1.0460 support

EUR/USD is inching higher after steep losses in the previous session. The market is waiting cautiously for further developments in France and looks ahead to a big week for U.S. economic data.

PM Michel Barnier’s coalition government is on the brink of collapse, and he's expected to face a vote of no confidence tomorrow, which he is unlikely to win. This could lead to further political uncertainty in the eurozone's second-largest economy.

Political instability runs alongside a weak economic outlook. Yesterday's PMI data showed that the region’s manufacturing sector recession continues and shows no sign of letting up.

Adding Trump's threat of trade tariffs when he takes office in January to the mix, it's hard to be anything but bearish towards the Euro.

EUR/USD parity wasn't even a topic for conversation a few months ago. Now, it looks like a possibility in 2025

Separately, the US dollar is easing lower, giving back some of yesterday's gains. The US dollar typically suffers seasonal weakness in December. However, following Donald Trump's indication of support for a stronger dollar, that might not necessarily be the case this year.

Over the weekend, trump threatened tariffs, on BRIC members that weren’t committed to the USD as a reserve currency.

Attention today now turns to jolts job openings, which are expected to hold steady at 7.44 million.

The data comes ahead of a busy week for U.S. economic figures, including ADP payrolls, ISM services PMI, and Friday's non-farm payroll report.

Strong data could see the market rein in fed rate cut expectations fella.

EUR/USD forecast – technical analysis

After running into resistance at 1.06, EUR/USD rebounded lower but found support at 1.0460, the 2023 low. The price trades caught between these levels. The RSI is below 50 and the 50 SMA crossed below the 200 SMA in a bearish signal.

Sellers will look to extend the 2-month bearish trend by taking out support at 1.0460 to brig 1.04 into focus ahead of 1.0330, the 2024 low.

Any recovery would need to rise above 1.06 to negate the trend and create a higher high. Above here, 1.07 comes into play.

Oil rises ahead of inventory data & OPEC’s meeting later in the week

  • OPEC+ is expected to postpone the unwinding of production cut
  • Chinese data helped the demand outlook
  • Oil trades in a familiar range

Oil prices are rising in the European session but continued to trade in a narrow range ahead of the OPEC class policy meeting on Thursday.

The market is expecting the group of oil producers to delay its planned unwinding of production cuts beyond January 2025 in the hope of rebalancing the market and protecting prices. The outlook for supply surplus has put pressure on prices, meaning there is little option but to defer.

 Yesterday, Chinese factory activity expanded, raising hopes that the oil demand outlook is improving as the recent stimulus measures seep through the economy. However, optimism over data from China is being offset by questions over the outlook for Fed rate cuts in the coming months.

Geopolitical tensions remain in focus in the Middle East after the US-brokered ceasefire deal between Israel and Hezbollah appears to be on shaky ground.

Attention now turns to US crude stockpiles which are expected to have fallen last week while gasoline and distillate inventories are forecast to have risen. API data is due today, and EIA inventory data will be released on Wednesday.

Oil forecast – technical analysis

Oil continues to trade within a familiar range that it has traded within since September. The price is capped on the upside by 71.50 -72.50 and around 67 -67.50 on the downside. The RSI is neutral.

Sellers will want to wait from a break below 67.00 to enter a sell position, bringing 65.50, the 2024 low, into focus ahead of 63.50, the October 2023 low.

Should buyers rise above 72.50, bulls will look to 75.00 round number and 76.60 the 200 SMA.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

© FOREX.COM 2024