EUR/USD Daily Price Forecast – Dollar Regains Upper Hand on Higher Treasury Yields

The pair has come under pressure once again on the back of dollar strength but as usual, it continues to trade within the range at this time
Colin First
EURUSD Tuesday
EURUSD Tuesday

The EURUSD pair opened for the week with common currency having the upper hand, however the pair began a slow downtrend movement as US Greenback gained positive traction helped by a rise in Treasury yields on expectations that the Federal Reserve would continue raising interest rates despite criticism from President Donald Trump. The relatively small gains in the dollar compared with jumps in longer-dated Treasury yields reflected currency traders’ concerns over Trump’s comments late last week that bemoaned the effects a strong currency. Currently, the EUR/USD pair is trading at 1.1687, having hit a high of 1.17504 yesterday. The daily chart shows the pair has charted a narrowing price range over the last 5-1/2 weeks. Consequently, the volatility as represented by the gap between the Bollinger Bands (standard deviation of +2,2 on the 20-day moving average) has dropped to 0.017, the lowest level since April 24. An extended period of low volatility is often followed by a big move in prices (bullish/bearish) and the asset develops a trend in the direction of the breakout.

EURUSD Under Pressure

The pair may turn volatile following the release of the preliminary Eurozone PMI numbers today. However, the range breakout is more likely to happen after Thursday’s ECB rate decision.  Trump took the wind from the dollar bull sails, and they haven’t really been able to replace it. However Dollar’s momentum against Euro is expected to remain bullish during today’s trading session as Greenback has strong support from treasury yields. On release front, European market will see a bout of news, with Eurozone Markit Composite PMI, Service PMI & Manufacturing PMI seeing slightly dovish forecasts, Similarly German & French PMI’s also have slightly dovish forecasts and if the data meets expectations, Euro could see continued downward movement.

EURUSD Hourly

When looking at chart in technical perspective, higher timeframes have the pair rejecting from recent swing points, etching in a downside channel on H4 candles while Daily candlesticks see a constraining bearish flag forming.  Prices have carved out a Triangle chart pattern, a setup typically indicative of trend continuation. In the context of the preceding drop, that carries bearish implications. From here, a daily close below support in the 1.1527-77 area would double as a break of the Triangle floor, signaling the next leg lower is at hand and exposing the next barrier in the 1.1268-1.1313 region. Alternatively, a turn above Triangle top resistance – now at 1.1766 – targets recent swing highs in the 1.1840-52 zones.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US