EUR/USD Daily Price Forecast – EURO Lacks Strength to Break Resistance as Trump Makes Move to Weaken Both Sides of the Pair

The Euro has managed spirited recovery against the US Dollar after finding support at the 1.13 figure but the move higher may be running out of steam. The Euro was the top performing currency last week, gaining ground alongside global equity markets as risk appetite broadly rebounded. With contagion concerns about emerging markets failing to materialize in any significant manner, the sense of feeling among traders is that the Turkish Lira meltdown is isolated, allowing those currencies most impacted initially – the Euro included – to recover. However the bulls appear to take a breather, pushing the EUR/USD pair back towards the 1.16 handle heading into the German IFO business surveys slated for release at 0800 GMT. As of writing this article, EURUSD pair is trading at 1.1620 down 0.03% on the day.

Trump Offers To Buy Italian Bonds in Bid to Weaken Both EURO & USD

The major paused its rebound just ahead of the 1.1650 levels, despite persisting broad-based US dollar weakness, as markets await the sentiment on the European markets for the next push higher.The greenback remains broadly undermined by an unexpected dovish tone delivered by the Fed Chair Powell during his speech at the Jackson Hole Symposium. Powell confirmed the need for gradual rate hikes, which remains data-dependent. Also, a bigger-than-expected drop in the US durable goods data keeps the downbeat tone intact around the buck. However, the retreat in the major could stall should the German IFO business surveys better expectations and provide the much-needed boost to the EUR bulls. The German IFO business climate for August is expected to arrive at 102.0 versus 101.7 previous.

Buyers finally showed the kind of conviction needed to push price higher on Friday but the move up was stalled by the 76.4 retracement level @ 1.1641. An attempt to break free of said resistance level earlier today also failed as highs reached 1.1653 before falling thereafter. In the near-term, as long as price stays above 1.1600, we could believe that bias still favors buyers as it sort of defines the “exhaustion level”. If price can’t consistently hold a move above the figure level, then it’s looking more and more likely we’ll be testing the 100-hour MA (red line) instead of making a run higher. In long term, Trump who wants to see a weaker US dollar in his bid to undermine bullish influence on US Greenback from Fed rate hikes has offered to buy Italian Government Bonds in 2019 when the Rome treasury is scheduled to issue about 400 billion euros ($462 billion) worth of debt. This move could weaken EURO as well as it encourages the Italian government ahead of its budget battle with the European Commission but could also see a weaker USD in broad market which is a win-win situation for Trump.