EUR/USD Daily Price Forecast – EUR/USD Pullback from One Month High On Positive US Macro Data

EUR/USD rallied to fresh August highs in European trading on Tuesday, briefly trading above the 1.1700 handle prior to paring a bulk of the day’s gains. The pair signals some potential for a pullback over the near term after an impressive two-week rally however, the larger time frames seem to indicate that the dollar correction may just be starting. Euro remains on the back foot in relatively subdued Asian morning after retreating from Tuesday’s fresh 4-week high of 1.1734 to 1.1691 in New York as rising U.S. yields and upbeat U.S. consumer confidence triggered broad-based short covering in the greenback. As of writing this article, the EURUSD pair is trading at 1.1692 down 0.03% on the day. The Euro is currently trading in a rising wedge price pattern in the 60 minutes time frame which is a potential risk to the upside. The pair needs to get back above 1.170 point and head back up to possibly retest resistance around 1.1728 to 1.1734 in order to continue steady uptrend movement in near future.

US & French GDP Are Main Focus of Investors Today

The bullish breakout would happen if the US second quarter GDP is revised lower today, reinforcing the dovish Fed expectations. Further, the risk assets need to continue rising, although the lack of progress in the trade negotiations between the US and China could complicate matters for the risk sentiment and the common currency. Aside from U.S. GDP, the European market hours will see release of Gfk consumer confidence in Germany and consumer spending & GDP data in France. A better than expected European macro data could help the pair move above 1.170 handle but investors would wait for US GDP data before placing any major bets. Short term traders will also focus on trade related headlines as news on talks between US, Europe & Canada could greatly affect the Greenback’s momentum.

EUR/USD appears poised to be confined to a 100-pip range in the week ahead as it looks to close out the month of August.  Notable levels include 1.1733/1.1750 to the upside and 1.1654/1.1623 to the downside. The upside break may remain elusive if the lack of progress in the US-China trade talks hurts risk assets and the US GDP is revised higher. The Euro is currently trading in a rising wedge price pattern in the 60 minutes time frame which is a potential risk to the upside. Depending on geo-political events and macro data outcome there is a high possibility that prices might continue a range bound movement within the wedge price pattern until the pair manages to make a definitive breakout.