EUR/USD Daily Price Forecast – EUR/USD Moves above 1.15 Handle on Greenback’s Weakness Following Trump’s Comment

EURUSD pair has taken to bull momentum since trading session opened for the week and pair found fresh trigger during north American session yesterday which helped the pair move back above 1.15 handle in early Asian market hours. Earlier in the day, the pair hit an intra-day high of 1.1542 as news hit the wires on Monday that President Trump voiced concern regarding Fed’s policy tightening at a Hampton’s fundraiser this weekend. As a result, the 10-year yield fell more than 5 basis points to 2.82 percent, dragging the USD lower with it. Moreover, the drop in the bond yields and the US dollar indicates the markets are worried that Trump’s criticism of the Fed may force the central bank to hike rates at a slower pace. As of writing this article, EUR/USD pair is trading at 1.1530 up 0.42% on the day.

Investors Focus on Geo-Political Events As Macro Calendar Remains Silent

On release front, macro calendar was silent on both sides of pair on Monday except for German PPI MOM data which saw disappointing outcome, however this had little impact on EURO’s momentum. Moving forward investors focus on FOMC updates from US market on Wednesday’s North American market hours as both markets remain silent ahead of same in next 48 hours. Investors also remain focused on updates from Sino-U.S. trade talks as the outcome will provide high volume of volatility and market impact across all key global markets. While the dollar turned soft as investors pulled out of the currency ahead of anticipated talks this week between China and the United States, which some market participants believe might lead to an easing in their escalating trade dispute and result of Trump’s vocal dis-contempt on Fed rate hikes, this situation can be viewed as temporary slowdown in market.

This is a proven fact as market has regained momentum post slight downward movement on all previous occasions when Trump voiced his opinions over Fed rate decisions. As long as the U.S. economy is okay, there is no reason to stop the rate hikes from the Fed’s point of view which keeps long term outlook of US Greenback unchanged. Looking ahead, the EUR/USD could continue to climb toward 50-day MA located at 1.1613 if the treasury yields extend the decline. It is worth noting that the EUR/USD may not be able to score gains on the back of a drop in the Treasury yields if the Italian bond yields rise on fiscal concerns. So, the EUR bulls need to keep an eye on how the Italian government bond yields are behaving. Expected support and resistance for the pair are at 1.1480, 1.1440, 1.1400 and 1.1550, 1.1590, 1.1620 respectively.