EUR/USD Price Forecast – Price Falls Below 1.14 Handle On Firm USD

The EURUSD pair saw sharp downside price action yesterday as U.S. dollar managed to retain its strength in the broad market for the fourth consecutive trading session. Despite Dollar bulls facing bearish influence from dovish Fed stance and mixed macro data outcome in U.S. markets, the pair managed to stage steady downside price movement as recent positive price rally of the pair was influenced by broad-based USD weakness rather than EURO’s strength. Further EURO is also suffering from cautious investor stance as concerns of economic slowdown griped investor sentiment in European market owing to disappointing macro data outcome in EURO area off-late. The reason USD was unable to stage a breakout was owing to healthy risk appetite in the broad market and disappointing macro data outcome.

Disappointing Macro Data Outcome had Little Impact on USD

While mixed macro data outcome managed to limit downside action early in American session, EURO lacked the necessary fundamental support to sustain its hold over recent highs. This combined with the strength of US dollar in the broad market has helped establish a steady downside price action and breach multiple critical support levels during Pacific-Asia market hours. Further Asian market session saw the pair decline below 1.14 handle but holiday thin market has created a scenario of less volatility and trading volume which has prevented the pair form breaching last level of critical support at 1.1390 handle for time being. As of writing this article, EURUSD pair is trading at 1.1395 down by 0.17% on the day.

Moving forward investors look to macro data release for the day as the outcome could result in US dollar managing to gain a bearish breakout. On the release front, European calendar remains silent for the day aside from German factory orders data, while U.S. calendar sees the release of building permits, core durable goods orders, core retail sales, and Preliminary GDP (QoQ) data. Better than expected outcome in US macro data today will help US Greenback breach critical support at 1.1390 handle which opens the door for further sharp downside price action towards mid 1.12 handle. On the flipside, a disappointing outcome in US macro data could help EURO regain hold above 1.14 handle, but the same is unlikely as US Dollar continues to grow strong in broad market for a fifth consecutive session today.