EUR/USD Daily Price Forecast – EUR/USD Moves Range Bound Amid Strong US Dollar Sentiment Owing to Trade War Woes

The EUR/USD closed on a weak note at 1.1581 yesterday as the uptick in the treasury yields put a bid under the greenback. However, the daily loss would have been bigger had the pair not rebounded from the intraday low of 1.1530. More importantly, the pair’s recovery from the low of 1.1530 to 1.1581 ensured the support remains strong in medium term. Further, it attached a long wick to the daily candle, which is usually considered a heads up on direction change. Indeed, the pair is reporting moderate gains at 1.1592 up 0.09% on the day as of writing this article, having clocked a high of 1.1608 in Asian market hours. However, bull reversal would be confirmed only if the pair closes today above the previous day’s high of 1.1620.

Macro Data Outcome to Decide Direction of Shared Currency’s Future Movements

A move above 1.1620 could be seen if the treasury yields retreat from the three-week highs clocked yesterday and the Eurozone retail sales, due at 9.30 GMT, beat estimates. However, if the 10-year treasury yield continues to rise, then the EUR/USD could come under pressure. Add to that, an uptick in the Italy-German yield spread could result in the pair testing yesterday’s lows with possibility for a bearish breach on current support level. USD traders returned from the Labor Day long weekend uninspired, but the week could see a return of the Greenback as trade war fears linger in market with investors cautiously observing how market would react once US President Trump implements tariff on Chinese goods worth $200 billion.

Yesterday’s Euro zone PPI data could be viewed as a boon to shared currency as it could be one of major factors that helped EURO on its rebound momentum. On US market, ISM manufacturing data such as PMI, Prices and Employment saw better than expected result which also supported US Greenback’s momentum in broad market. Today’s calendar will see Markit composite PMI in Eurozone along with retail sales data and speech by ECB executive board member Peter Praet while US market will see release of trade balance data and Red book data. Expected support and resistance for the pair are at 1.1577, 1.1530, 1.1500 and 1.1620, 1.1700, 1.1733 respectively.