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• The EUR/USD currency pair went into the weekend near the 1.08066 ratio, which was the low for the week and a retest of the depths seen on March 1.
• Trading in the EUR/USD cross, like all other major currency pairs teamed against the US dollar, has been difficult over the past month. In fact, Forex has been volatile in many respects since the start of 2024.

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The volatility witnessed last week may make traders a bit nervous about the potential results for the coming week. Shifting behavioral sentiment in financial institutions continues to cause whipsaw price action.

Trading the EUR/USD currency pair has been comparable to riding a surfboard on big waves. When the momentum of the trend has felt easy to interpret, the currency pair has been comfortable. But upon data announcements which continue to spring forth surprises, risk-taking tactics suddenly become chaotic.

Growth and More Inflation Data for the EUR/USD Later This Week

As Monday’s trading begins in the EUR/USD pair, day traders will likely be keen to see where sentiment generates direction. The currency pair is certainly testing lows, but if current support levels do prove vulnerable, speculators should keep in mind that the EUR/USD cross did trade at lower values in February. It should be noted that the EUR/USD duo tested the 1.07000 ratio on Feb. 14.

Sentiment regarding the US dollar is likely better then it was in the middle of the previous month. Financial institutions still believe the Federal Reserve will likely cut interest rates a couple of times, and perhaps even believe the Fed’s optimism that three Federal Funds Rate cuts are still possible. The US will present GDP numbers this coming Thursday and Core PCE Price Index data this Friday.

Technical and Fundamental EUR/USD Sentiment Colliding

The past week of trading produced a high of nearly 1.09450 on Thursday of this week, but something certainly caused a fast downturn in the EUR/USD currency pair late on Thursday and throughout Friday. It would be easy to say behavioral sentiment regarding the Fed outlook was nervous, but technically the highs hit on Thursday did seem to be a bit too optimistic, and may have also sparked selling.

Traders should not get too comfortable early this week with the thought all of the volatility is now finished. There are likely more gyrations to come in the EUR/USD currency pair, as the CB Consumer Confidence report will come from the States on Tuesday.

If this number comes in stronger than expected, it could set up another roadblock for bullish sentiment in the EUR/USD cross. The 1.08000 price and above may be psychologically important for both technical and fundamental traders.

• If the EUR/USD pair were to fall below the 1.08000 level early this week, it would be surprising for traders with bullish sentiment, but on a technical basis, this would merely be testing the lows seen in February.
• A lower price in the currency pair would certainly display some nervous sentiment, and a potentially stronger US dollar could be contemplated over the near-term.

EUR/USD Weekly Outlook: Speculative Price Range is 1.07475 to 1.09545

Traders looking for reversals higher from the EUR/USD pair should be careful. There seems to be enough nervous sentiment in the broad Forex market that could still spur on some additional selling as the week starts.

If the Consumer Confidence report comes in weaker than expected on Tuesday, this may set up bullish traders with enough confidence to pursue buying positions if they are fundamentally inclined, but they should remember growth numbers will come on Thursday via the GDP.

The inflation numbers on Friday will also be important, but speculators need to understand that even though the Federal Reserve views the PCE Price Index as important, its results may not sway the opinions of financial institutions. Traders need to brace for more volatility this coming week, and use take profit and stop loss orders wisely so they can avoid more storms in the EUR/USD currency pair.

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