EUR/USD Daily Forecast – Fiber Set on Recovery Path Underpinned Greenback Slowdown

Trump hints to add the ‘very dangerous’ Huawei in the trade deal. Trade tensions worsened following such a strong statement. Euro pair gained out of the USD plunge.
Nikhil Khandelwal

After riding over a straight road, the Euro pair made a sudden jump in the Asian trading session. Fiber had upshot from 1.1180 levels to around 1.1204 levels amid US Dollar Index fall. The Greenback had slipped in the morning session over rising trade tensions.

Recently, US President Trump said that the ‘very dangerous’ Huawei might be a part of the trade deal. The US had restricted firms from doing business with the Company. The President also claims that the firm is connected not only to China but also to the Chinese Communist Party. Google had already made a move to stop providing Android updates for the Company’s devices. Japanese Panasonic Corp. and British Chip Designer ARM have stopped trading Huawei products.

The Company must have incurred significant losses after the US blacklisted it. However, China appears quite enraged over this issue and shows disinterest in continuing talks.

Meanwhile, ongoing Euro Elections will release results on May 26. Post result announcement, traders do expect high volatility in the pair’s movement. Depending on the election result, Officials would decide a new ECB President. Chief Mario Draghi would step down in October 2019 on completion of his term.

Brexit continued to remain uncertain. UK PM Theresa May might step down soon as Tories compel her to do so. House Leader Andrea Leadsom had recently resigned her position showing strong disagreement to May’s new deal.

During the day, the EUR/USD might find more upside as bearish US Goods Orders Data gets underway.

EUR/USD Impacting Events

As of today, the economic calendar remains silent, particularly on European events. During the afternoon session, the most significant USD event, the April Nondefense Capital Goods Orders Excluding Aircraft will get released. The Consensus estimates the Nondefense Goods data to appear bullish this time. Laterwards, the Durable Goods Orders excluding, Defense and Transport will come out. This time the market expects lower reading with these reports. Furthermore, the final figures for April Durable Goods Order will display, and it is anticipated to record a negative 2% today.

Technical Analysis

45-Minutes Chart

EURUSD 45 Min 24 May 2019

During the Asian session, the EUR/USD pair appeared consolidated around 1.1180 levels. In the 45-Minutes Chart, the Ascending Triangle indicates contraction near its recent high near 1.1196 levels. The pair hovered in the upper vicinity of the Bollinger bands (BB), alluding a bull call. The RSI stood near 70 levels signaling bullish prospects.

3-Hours Chart

EURUSD 180 Min 24 May 2019

The pair stood above all significant 50-days, 100-days, and 200-days SMA. The 50-days Simple Moving Averages (SMA) was below the 100-days and 200-days SMA, alluding near-term bull call. If the pair continues its upward momentum, then the next resistance line awaits near 1.1224 levels. And somehow if the pair drops, then it might find support around 1.1108 levels. The converging lines of Moving Average Convergence Divergence (MACD) signaled an excellent opportunity for buying.

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