eur-usd-fundamental-analysis

Foreign exchange market or Forex is world’s largest currency trading market which has a daily average transaction of US$5 trillion. The primary purpose of Forex trading mainly consists of buying a currency and selling it to another one. The goal of it is to profit from the rise (appreciation) and fall (depreciation) of currency rates by analysing them; such as eur usd fundamental analysis to profit from it.


Forex being estimated as one currency versus another generally means a 'base' currency and ‘counter’ currency for a currency pair. In this case, USD is counted as a base currency and euro as its counter.


Eur usd fundamental analysis


A small history of EUR/USD


The two factors making EUR/USD a unique pair for the newcomers in forex trading would be a well-balanced combination of liquidity and volatility. Eur usd fundamental analysis states an impact of the US economy, and the Eurozone as the US dollar is counted as the most widely held and heavily traded currency, and euro being the second most popular currency all over the world. Being the world’s fastest growing economy, this currency pair influences the direction of these two economies, strengthening and bringing a change in the level of interest rates.


Current Analysis


With a current EUR/USD quote at 1.11240, the euro is seen to be at a constant level. With a forecast of a 0.2% gain in its final CPI (Consumer Price Index) there is an expectation of Eurozone inflation. As its indicator has not risen above 0.3% in 2016, it is pointing to constant low level of inflation on the continent. On a whole, you can see EUR/USD’s forecast is pointing towards a hike of 15% in September and a probability of a 43% raise in December.


Future Predictions


Using the past data and adjusting its coefficients of the econometric model taking assessments from analysts, a forecast of EUR/USD has been predicted.


A Forex forecast of the coming months of 2016 has predicted a fall in the exchange rate of approximately 1.13 which can go down by the end of 2016 to 1.10. Its maximum rate is forecasted with a fluctuating level between 1.15 and 1.13 and its minimum rate to hover in between 1.11 and 1.09.


For the initial four months of 2017, an exchange rate has been forecasted with a hike somewhere between 1.11 and 1.17 with a change of 2.63% at the end of the fourth month. A forecast for maximum rate has been estimated between 1.16 to 1.19 and its minimum in between 1.11 to 1.14


As per the aud usd fundamental analysis, there is a downgrading possibility of a sovereign credit rating of Australia where this trading pair of AUD/USD started with a current gap down of approximately 50 points.


Although the rise of EUR/USD continued, you can see a positive inflation data rising on an annual basis by 1.5% helping AUD rise again.


In a similar way according to usd jpy fundamental analysis, yen being the most traded currencies with a lower interest rate, the Bank of Japan had made an expansion on the purchase of yen. Investing in USD/JPY can boost your exports as the money is getting doubled devaluing Yen but it is also increasing the import prices of your commodities.

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