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EUR/USD Daily Price Forecast – Dovish Stances Of Major Central Banks Capped The Early Gains For The Pair

By:
Nikhil Khandelwal
Published: Mar 28, 2019, 06:37 UTC

US Q4 GDP numbers will have a significant impact on the global economy undermined on recession fears. The SMAs for major days lie above the pair’s trading level, revealing a bearish outlook.

EuroUsd

The EUR/USD experienced a minor correction on the early hours of the Thursday trading session following an escalation in the US Dollar Index. The index had soared on the grounds of an increasing dovish outlook of the major world banks.

Yesterday, ECB President Mario Draghi had warned of sustained downside risk for the global economy. Reserve Bank of New Zealand (RBNZ) kept the interest rates unchanged but hinted of a likely rate cut to happen soon before and in November. The Cable pair remained subtle at 1.3187 level following the UK PM May’s proclamation that she will get down from her premiership if MPs backed her twice-rejected deal for a Brexit.

At the time of writing this article (05:50 GMT), the pair was trading at 1.1258 level.

Amidst the fragile global economic environment, the EUR/USD may find some light to stay positive at the day’s closing underpinned the following key events to happen today.

Key EUR/USD Impacting Events

By 10:00 GMT, (Medium Volatile Event)

European Commission will release the Business Climate Indicator for March. The consensus estimates the index to come around 0.66 points as compared to the previous 0.69 points. There is an evident connection between the business climate index and the industrial production of the region. Hence, this event must be watched closely today.

By 12:30 GMT, (High Volatile Event)

The US Bureau of Economic Analysis will release the US Gross Domestic Product (GDP) Annualized number for the fourth fiscal quarter. Last week, the world market was alerted on the possibility of a recession to happen in the near term on the occurrence of an inverted yield curve which preceded every recession occurred till date.

The market is awaiting the US GDP to come before adding a double down that a recession is imminent. This event is highly significant to all the major currency pairs which include EUR/USD. The Street Analysts have taken a bearish stance on the GDP number expecting it to report around 2.4 percent which is below the previous GDP of 2.6 percent.

By 13:00 GMT, (High Volatile Event)

Destatis, the Statistical Office of the EU, will release the Harmonized Index of Consumer Prices (HICP) index YoY for March. The consensus estimates the HICP index to report around 1.6 percent which is lower to the previous HICP index of 1.7 percent. Retrospective data reveals good volatility observed in the EUR/USD pair following the release of the HICP index.

Technical Overview

EURUSD 15 Min 28 March 2019
EURUSD 15 Min 28 March 2019

The Simple Moving Averages (SMA) for the major days were above the EUR/USD trading level. This observation invokes a bearish stance on the pair movement for the day. The pair had touched the resistance level of 1.1267 in the last few days and has a higher probability of it reaching this level again during the day. There is no as such momentum noted in the Moving Average Convergence Divergence (MACD).

About the Author

Nik has extensive experience as an Analyst, Trader and Financial Consultant for Global Capital Markets. His vision is to generate Highest, Consistent and Sustained Risk-Adjusted Returns for clients over long term basis and providing them world-class investment advisory services.

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