EUR/USD Daily Forecast – Euro Holding Above Major Support

EUR/USD Volatility Slows as Investors Await G20 Summit Outcome

Volatility in EUR/USD has slowed over the past few sessions as the pair has fallen into a range. There is some US data later today that stands to move the pair, however, the emphasis is on the G20 Summit later this week.

Investors are hopeful that the Summit will result in some kind of de-escalation of the trade war between China and the US. Progression will be extremely important for the dollar since the markets are focused on easing measures from the US central bank. This is mostly predicated on a weakening economy moving forward, and the ongoing trade war has been a contributor.

I don’t think US data that will be released later in the day will move the exchange rate much. Analysts expect GDP figures out of the United States to improve to an annualized 3.1%. However, it is the final reading and is not very often that the final release deviates significantly from expectations.

There are some other releases that tend not to have a big impact. One of them is the weekly unemployment claims report. I’ll be keeping an eye on this one to see how the labor markets are doing. The first two readings of the month missed expectations and there were upward revisions for the prior week. Last week’s reading, however, came in ahead of expectations.

Technical Analysis

A level that I have been focusing on is 1.1347 as it reflects the early June high. As well, the 200 moving average on a daily and weekly charts are within close proximity of the level. So far, EUR/USD has held three declines to the level.

The pair needs to get above 1.1400 to start to signal it is resuming the uptrend. Currently, I don’t see that happening. Mostly because the I think investors want to see the outcome of the G20 meeting. Also, I think the Fed speeches earlier this week removed a big driver for the dollar to continue its decline.

This is not to say I’d look to short EUR/USD here. The pair seems to be within a range and sometimes its best to stick to the sidelines.

Bottom Line:

• 1.1347 remains critical support to the downside
• A catalyst might be required for the pair to break out from its range above 1.1385-1.1400.