EUR/USD Daily Price Forecast – EUR/USD Range Bound Ahead of Powell’s Speech on Last Trading Session of the Week

The dollar was the lead gainer in trading overnight but EUR/USD buyers have managed to stay in near-term control despite that. The EUR/USD is currently trading around 1.1550, having failed to take out the 50-day MA hurdle on Wednesday. The common currency picked up a bid at the low of 1.1301 on Aug. 15 as the investors scaled back expectations of Fed rate hikes in the wake of the turmoil in Turkey and other emerging markets. Further, Trump’s criticism of the Fed triggered fears the central bank may slow down the pace of policy tightening in the near future. However, the Fed minutes released on Wednesday showed the policymakers are set to raise rates next month. As a result, the USD found bids and the EUR/USD faced rejection at the 50-day MA hurdle.

Both Sides of Pair Try to Gain Upper Hand Ahead of Powell’s Speech

Moreover, for EUR/USD, the path of least resistance is to the downside as the probability of a rate hike in December hike sentiment has risen back above 60 percent. Meanwhile, Fed watch is pricing a 25 bp hike in September at 92 percent. However, the investors would again scale back the Fed rate hike expectations, sending the USD lower across the board if Fed’s Powell, during his speech at Jackson Hole later today, stresses more on the negatives laid out in the minutes. In this case, the EUR/USD will likely find acceptance above the 50-day MA, currently located at 1.1608.The German second-quarter GDP, due for release at 06:00 GMT, and the US durable goods orders figure, scheduled for release at 12:30 GMT, may not have a big impact on the pair as investors are likely to stay on the sidelines ahead of Powell’s speech.

As of writing this article, EURUSD pair was trading at 1.1575 up 0.30% on the day. Sino-U.S. trade related talks which was one of most anticipated and followed event of the week ended two days of trade talks without any major breakthroughs. The talks between the two nations ended as their trade war escalated on Thursday after a new round of U.S. tariffs kicked in on $16 billion worth of imports from China, followed immediately by reciprocal tariffs from China. a safe haven currency, the dollar has benefited from fears of international trade turmoil in recent months. The dollar index DXY which measures the greenback’s performance against six major currencies is basically flat on Asian market session trading at 95.656. It rose more than half a percent, snapping a losing streak that started last week.

From technical perspective, the pair saw price action in one hour chart moved towards the swing high area (resistance-turned-support) around 1.1535-40 and stalled around there before tracking higher. The overnight lows failed to test the 100-hour MA (red line) and that continues to lend a near-term bias favoring buyers. But the coast isn’t clear just yet. Since the track lower, price has been moving higher but it has been respecting a near-term trend line formed from this week’s price action. Couple that with a downwards trend line from the topside seen this week, a wedge pattern can be seen and the pair now looks set for a breakout – one form or another. Expected support and resistance for the pair are at 1.1530, 1.1508 and 1.1608, 1.1623 respectively.