EUR/USD Daily Forecast – Euro Falls in a Range Above Support

Incoming Data Stands to Create Volatility

EUR/USD has been trading sideways in a tight range since the North American open yesterday. Upcoming data releases might trigger a bigger move in the pair later in the day.

Events on the calendar today that stand to impact the exchange rate include CPI out of Germany and GDP from the US.

Earlier today, GDP out of France ticked higher to come in ahead of analyst expectations. Consumer prices in Spain fell slightly short of analyst estimate. Neither of the two releases had much of an impact on the exchange rate.

Trade war fears have eased this week after an early week comment from Trump that the two parties were ready to work towards a deal. Equity markets are seeing a strong bid in early day trading today and the S&P 500 has wiped out last weeks decline. EUR/USD has become less sensitive to fluctuations in risk sentiment since the return of risk appetite.

Technical Analysis

A support level in EUR/USD at 1.1075 has been able to hold the exchange rate higher on several tests of it this month. We may see a bit of a bounce from it, but so far sellers have dominated the week and there has not been any technical evidence of a turn as of yet.

If we do see a recovery attempt, 1.1100 prevents a hurdle. While the below it, the prospects of a broader recovery for EUR/USD appear grim.

Similar to EUR/USD, the dollar index (DXY), which carries a strong inverse correlation with the currency pair, is facing overhead resistance.

DXY was last seen testing the 98.25 price point which had held it lower twice in April and twice in May. The index turned in both cases to pull back more than 1%. In this context, the current technical area for the dollar and EUR/USD carries some potential of a bit of a pullback, but as mentioned, there has not been any technical evidence of this playing out yet.

Bottom Line

• Volatility has declined and a range has formed.
• Upcoming data releases that stand to move EUR/USD include US GDP and CPI out of Germany.
• EUR/USD is holding above a support level at 1.1075.