Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Euro Forecast: EUR/USD Price Outlook Still Positive, 1.22 in Traders’ Sights

Euro Forecast: EUR/USD Price Outlook Still Positive, 1.22 in Traders’ Sights

What's on this page

Fundamental Euro Forecast: Bullish

  • Clear signs that the global economy is recovering strongly could give a further boost to EUR/USD in the days ahead as more investors move out of safe-haven assets such as the US Dollar and into “risk-on” assets including the Euro.
  • The first target for the bulls is the 1.22 round number and then the February 25 high at 1.2243.

Euro price outlook: further gains

Clear signs are emerging that the global economy is now expanding rapidly after the sharp contraction caused by the coronavirus pandemic, and that should mean more losses for the safe-haven US Dollar and more gains for the currencies traders turn to when sentiment improves – the Euro included.

Among the signals last week of a decent upturn, the clearest was the news that the US economy expanded at a remarkable 6.4% annualized rate in the first quarter of 2021. While that number was arguably backward-looking, early indicators for April were positive too, with Eurozone economic, industrial and service-sector sentiment indicators all coming in above expectations, as did German inflation.

That’s all positive for EUR/USD even though – as I warned here last week – there could be a pause for breath after the recent gains. That said, the 1.22 round number and the 1.2243 high reached on February 25 both look achievable before too long even if much of the good news has been priced in already.

EUR/USD Price Chart, Daily Timeframe (December 29, 2020 – April 29, 2021)

Source: IG (You can click on it for a larger image)

Starts in:
Live now:
Nov 28
( 03:11 GMT )
Recommended by Martin Essex, MSTA
Weekly Commodities Trading Prep
Register for Webinar
Join Now
Webinar Has Ended

A step-up in EU vaccinations against the Covid-19 virus is also likely to have a positive impact on the region’s economy as Germany moves to relax restrictions for those people who have been vaccinated, France begins to lift its lockdown from Monday, and many Italian regions relax restrictions from Monday on businesses including restaurants, bars and cinemas.

EUR Forecast
EUR Forecast
Recommended by Martin Essex, MSTA
Download our Q2 Euro forecast
Get My Guide

Week ahead: Final PMIs

Turning to the economic data, the Eurozone statistics due in the week ahead are second-tier so unlikely to have much of an impact on EUR/USD as the focus will be on Thursday’s meeting of the Bank of England’s monetary policy committee and Friday’s US non-farm payrolls data.

Among the numbers due, final manufacturing PMIs and German retail sales data are released Monday, final services PMIs Wednesday, German factory orders and Eurozone retail sales Thursday, and German trade and industrial production Friday.

Check out our guide to the top trading opportunities in 2021 by clicking here

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.