EUR/USD Price Forecast – Bears Have Greater Grip On Price Action

The EURUSD pair opened for the week on a positive note following Friday’s sharp declines. While the pair managed to see positive price action across the day and close on a positive note, there was little upside move at the end of the day. The performance dynamics of EU & US bond market is the factor that continues to have major control over price action. Friday’s bond market antics caused a wave of risk-averse trading activity across Europe and American markets. However, positive European macro data and a slight rebound in American bond yields helped ease risk-averse investor sentiment resulting in yesterday’s positive price action.

Cues From Bond Market Keeps EURO in Bear’s Territory

But the activity in the bond market is still not out of the woods yet. Better than expected German macro data helped ease risk-averse investor sentiment. This helped EURO stage gains in European and American market hours. In the American market hours market saw healthy risk on trading activity. This helped EURO close positive in the broad global market yesterday. However, the bond market is still not out of the woods and activity in the bond market continues to hint at a recession in the U.S.A. This played a major role in limiting EURO’s gains yesterday.

The pair traded range bound in Asian market hours as traders await EU macro data update to re-affirm positive cues. As of writing this article, EURUSD pair is trading at 1.1313 up by 0.02% on the day. The pair is also facing bearish pressure from Brexit proceedings in the UK. While investors have taken a cautious tone and held back from placing major bets, headlines and macro data inspired momentum will continue to provide short bursts of directional cues. But the overall price action will follow the path put forward by cues from the bond market. On the release front today, EU calendar sees the release of GFK German Consumer Climate data while the US calendar will see the release of Building Permits, Housing starts, and CB consumer confidence data updates. Expected support and resistance for the pair are at 1.1300, 1.1280, 1.1230 and 1.1345, 1.1385, 1.1420 respectively.

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