EUR/USD Daily Price Forecast – EUR/USD Breached 1.16 Handle As US CPI Data Missed Expectations

The EUR/USD pair peaked rose to 1.1590 ahead of US data release yesterday, its highest since October 3, as speculative interest rushed away from the greenback.  Meanwhile renewed trade tensions, another round of US President Trump criticism on Fed’s tightening path and nose-diving equities resulted in dollar’s weakness extending across yesterday’s trading hours. Despite yields pulling back, equities were unable to regain ground falling further and with the sell-off spreading in Asia and Europe during yesterday’s market hours. The pair hit intra-day high at 1.15992 as US CPI data and unemployment data missed public expectations giving the common currency a bullish boost as trading transitioned into last business day of the week.

EURO is Main Benefactor of Dollar’s Weakness

In early Asian market hours today, the pair breached 1.16 price handle and hit an intra-day and monthly high of 1.16103 and is currently trading at 1.1606 up 0.11% on the day.  While Japan’s equities continues to trade in red today morning, other key markets such as India, Singapore and China saw their equities take on positive price action. The U.S. dollar traded at its lowest level this month against its major peers on Friday as declining U.S. treasury yields and further losses on Wall Street soured sentiment. The dollar index DXY – which is used to gauge USD’s value against six major currencies traded at 95 on Friday, down from its monthly high of 96.15 hit on Tuesday.

The common currency has become main benefactor of ongoing dollar’s weakness and is further supported by positive tone in minutes of the last European Central Bank (ECB) meeting which suggested that the ECB was on track to normalize its ultra-loose monetary policy this year despite concerns about slowing growth in Europe. Meanwhile on Italian budget update headlines, news outlets reported yesterday that the European Central Bank would not be throwing Italy a lifeline as long as the country continues to flaunt Eurozone budgetary guidelines indicating Italian budget updates could continue to be a thorn in recent future in European market. Expected support and resistance levels for the pair are at 1.1583, 1.1563, 1.1526 and 1.1611, 1.1624, 1.1676 respectively.