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Forex Zone: Intermediate-term Euro forecasts – broadly bearish


In this analysis we are going to spotlight the Euro in the aftermath of the substantial price action seen throughout global financial markets in March, April and into May, since the spread of the coronavirus, COVID-19 into Europe and the US.

Together with the impulsive moves across global stock markets, the Forex markets have seen significant price movements, with the Euro a notable mover.

We will look at the Euro against the US Dollar, the EURUSD Forex rate, but will also spotlight the Euro versus the Japanese Yen (EURJPY) plus against a number of the other major European currencies, with our EURGBP, EURCHF, EURSEK and EURNOK forecasts.

Macroeconomic backdrop

Global financial asset classes suffered a massive “risk off“ shock in March as the COVID-19 coronavirus spread from Asia, to Europe and the United States. Global stock markets plunged, whilst safe havens assets (such as Government bonds and Gold) surged higher.

In the Forex environment, most currencies plunged lower versus the US Dollar in March, as Forex markets saw a global thirst for US Dollars, with the US currency became the ultimate “flight to quality” currency.

April and early May has seen a shift to a “risk on” theme, with global stock markets rebounding, and the “risk currencies” the Australian, New Zealand and Canadian Dollars strengthening. But in this “risk on” scenario, the Euro has remained under negative pressures.

Technical Analysis of the Euro

The EURUSD Forex rate plunged lower in March with the global financial market panic as the US Dollar surged.

But the Euro was sideways and erratic in this “risk off“ phase versus the traditional safe havens, the Japanese Yen and Swiss Franc, whilst strengthening against the European periphery, versus the GB Pound, the Swedish Krona and Norwegian Krone.

With the resumption of the “risk on” theme through April and into May, the Euro has been choppy, but overall negative against the US Dollar, but notably weakened against the European periphery.

EURUSD forecast

A very erratic, broad consolidation theme through April and into May for EURUSD, after the plunging selloff in the first half of March and the surging recovery in latter March.

The underlying theme stays bearish from the negative April consolidation, whilst below 1.1039.

An even more bearish intermediate-term view for EURUSD in May needs a push below 1.0725 and 1.0633.

This can offer a move to 1.0500, 1.0340, maybe 1.0000 (parity).

What changes this? Above 1.1039 aims for 1.1147 and 1.1367 chart targets.

Daily EURUSD chart

EURUSD chart

EURJPY forecast

An erratic selloff for EURJPY since the start of 2020, with the latter March, mid-April and early May bearish accelerations sustaining the overall bearish theme.

A still more bearish intermediate-term EURJPY view for May needs a push below 114.42.

This can offer a move to 112.08, 110.00 and 109.53 chart targets.

What changes this? Above 117.78 chart and retrace barriers aims for 119.04 and 119.71 chart and retrace targets.

Daily EURJPY chart

EURJPY chart

EURGBP forecast

A negative consolidation theme for the EURGBP Forex rate through April and into May, after the plunging selloff in latter March.

The underlying theme stays negative from this selloff, whilst below dual peaks at .8864.

An even more bearish intermediate-term EURGBP forecast for May needs a push below .8671 and key .8621 supports.

This can offer a move to .8282 and .8000 targets.

What changes this? Above .8864 aims for the .8987 and .9183 retrace targets.

Daily EURGBP chart

EURGBP chart

EURCHF forecast

An erratic, but negative consolidation phase for EURCHF through April and now into May, after the early 2020 plunge and negative extensions in March and April.

Although erratic, the EURCHF forecast remains negative from this early 2020 selloff, whilst below 1.0635/55, retrace /chart resistances.

A still more bearish intermediate-term view for May needs a push below 1.0510.

This can offer a move to 1.0315, 1.0235 and maybe parity, 1.0000.

What changes this? Above 1.0635/55 aims for the 1.0710/16 chart/ retrace target, maybe 1.0788.

Daily EURCHF chart

EURCHF chart

EURSEK forecast

An erratic grind lower through April and a plunge at the end of the month and into early May, to now push below the 78.6% retracement (at 10.6080), of the whole rally from the December 2019 low (at 10.3972) to the mid-March spike high (at 11.3822).

An even more bearish intermediate-term view for May needs a push below the 10.4882/1715 area to aim then for 10.3972 and 10.1261/0963 supports from 2018.

What changes this? Above 10.8991 aims for the 11.1093 chart target.

Daily EURSEK chart

EURSEK chart

EURNOK forecast

A surging rally and then a plunging selloff in March for the EURNOK Forex rate, to probe the 618% retracement of the Q1 2020 rally, at 11.0848.

A still more bearish intermediate-term EURNOK view for May would see a more aggressive break below this support (at 11.0848), to then aim for retrace/ chart targets at 10.5180/4350 and maybe as low as 10.0013, even 9.7959.

What changes this? A more positive intermediate-term view for May needs a push above 11.6968 for 11.8185, maybe then even towards 12.7562.

Daily EURNOK chart

EURNOK chart

The intermediate-term Euro outlook: a summary of our Forex forecasts

In conclusion then, we see a bearish environment for the Euro against most of these major currencies, but particularly with risks skewed towards a weakening of EUR versus the Japanese Yen EURJPY), the Swedish Krona (EURSEK) and Norwegian Krone (EURNOK).

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Other major currency pairs

BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
SELL - rate is expected to go down, i.e. the first currency is expected to lose value against the second currency.

EUR/NOK – Live and Historical Rates

The Euro – used by the 21 countries of the Eurozone – is a major currency. The Norwegian krone on the other hand is not. The pair that these two currencies form is not a major, nor is it a commodity currency, despite the fact that the Norwegian economy is indeed heavily reliant on the sale of commodities.


The Euro represents quite probably the most ambitious attempt at a monetary union in the history of mankind. Introduced in 1999, the story of the EUR has mostly been one of success thus far, despite a few hiccups. Currently used by 21 nations, the EUR is supposed to be adopted by a number of other EU members like Hungary and Poland, who are currently dragging their feet in this regard. Indeed, following the 2008 financial crisis, which exposed the vulnerabilities and structural shortcomings of the common currency, the EUR has suddenly become a much less attractive option


The Norwegian Krone was introduced way back in 1875, when Norway became a member of the Scandinavian Monetary Union. While the Union fell apart in 1914, Norway has kept the krone. A said above, the krone is indeed a commodity currency. The economy of the country relies heavily on exports of petroleum products, natural gas and it makes great use of hydroelectric power. Fisheries have to be added to the list as well. Though it enjoys close ties with the EU, Norway is one of only two Nordic countries which have thus far refused to join the Union.

EURNOK Analysis

Because of extensive trade and geographical proximity, the correlation between these two currencies is indeed strong. The Eurozone isn’t the only major trade partner of Norway though, as the country exports energy elsewhere too. What this means in practical terms is that the evolution of the USD has a sizeable impact on the NOK too.

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