EUR/USD Daily Price Forecast – EUR/USD Rebounds Erasing Yesterday’s Loss as Investors Focus on German CPI & Employment Data

The Euro failed at 1.16890 support level in the 60 minutes price chart and slipped out of the wedge price pattern. The pair fell from 1.16890 to 1.16580, however it managed to bounce and made a swift recovery moving all the way upto 1.17074 finding stable support above 1.1690 handle. The pair had a good two-way move on Wednesday and was influenced by a combination of diverging forces. Reemerging Turkish Lira crisis, coupled with uncertainty surrounding Italy’s budget plans which initially dragged the pair to an intraday lows but the negative factors were largely offset by persistent selling bias surrounding the US Dollar, which found little traction from a report that showed US Q2 GDP growth was revised up to 4.2% from 4.1% initially reported. The pair recovered around 60-pips from daily lows and finally end the day just above the 1.1700 handle, posting modest gains for the tenth session in the last eleven.

Both Sides of Atlantic Have Enough Updates to Maintain High Level of Volatility across Today’s Market Hours

The up-move, however, lacked any strong follow-through during the Asian session on Thursday and remained capped below four-week tops, set on Tuesday amid lingering concerns over Turkey’s currency crisis. The USD selling pressure also seems to have abated, at least for the time being, and further collaborated towards keeping a lid on the positive momentum. As of writing this article, the pair is trading at 1.1693 down 0.12% on the day. Moving ahead, today’s Euro-zone economic docket highlights the release of flash German CPI print, which is likely to influence sentiment surrounding the shared currency. From the US, the release of core PCE index – the Fed’s preferred measure of inflation, coupled with personal income/spending data and the usual initial weekly jobless claims will also be looked upon to grab some short-term trading opportunities. Fed’s Powell downplayed the risk of overheating and defended the gradual rate hike path on Friday, forcing investors to scale back their expectations of faster fed tightening. As a result, the greenback took a beating in the last four trading days.

The dovish Fed expectations would strengthen further if the Fed’s preferred measure of inflation, scheduled for release at 12:30 GMT, prints below estimates. The July core personal consumption expenditure (PCE) – price index is seen printing at 2.2 percent year-on-year. The currency pair could pick up a strong bid in the run-up to the US inflation release if the German preliminary consumer price index (CPI) reading, due for release at, 12:30 GMT, beats estimates. Apart from the inflation figures, the common currency could take cues from the broader market sentiment, as represented by the action in the equity markets. From a technical perspective, the pair needs to make it through the 1.1735-45 immediate supply zone, coinciding with 100-day SMA, before traders start positioning for any further near-term appreciating move. A sustained break through the mentioned barrier seems to assist the pair to easily surpass the 1.1800 handle and head towards its next major hurdle near the 1.1850 region. On the flip side, any meaningful retracement slide might continue to find immediate support near the 1.1650-40 region, which if broken might turn the pair vulnerable to slide below the 1.1600 handle