EUR/USD Price Forecast – EUR/USD Back At 1.18 Handle as Dollar Rally Fades Post US Fed Update

The EURUSD pair has been trading at 1.18 handle across majority of Asian market hours and is expected continue on its bull momentum as current trend and expectations on ECB meet favors continued uptrend movement for the common currency. Yesterday US Fed delivered a rate hike as expected and took hawkish stance for future proceedings signaling two more rate hikes for the year. However the momentum that favored dollar bulls slowly lost its grip on the pair as rate hike was influenced by strong economy and not because of the need to contain inflation. Also yesterday’s market hours saw tension among investors as U.S.-China trade frictions was in focus as a senior Trump administration official mentioned that “U.S. President Donald Trump will meet with his top trade advisers on Thursday to decide on whether to activate the tariffs” on billions of dollars in Chinese goods.

EURUSD Back at 1.18

Moving forward investors focus has shifted to ECB rate decision updates that are scheduled to release later today. Recent comments from top ECB officials have sparked expectations the ECB may offer clues on its intentions to end its bond purchases by the end of the year at its upcoming meeting. Update on ECB’s meeting is expected to generate a stronger response in both volatility and trend development from the Euro than the Fed did for the dollar as QE tapering is believed to greatly impact and influence global risk trends. The unexpected balance of power is more than evident in the course struck by the EUR/USD both in the past session and past year.

On release front, European calendar saw dovish outcome with Switzerland’s PPI and Euro zone’s Industrial production data seeing worse than expected readings, while US PPI, Crude Oil Inventory & EIA Weekly Distillates Stocks saw better than expected readings. However the positive macro data failed to spur momentum in greenback’s favor as investors focus remains mostly on back to back central bank meets in US and European markets. Today’s calendar in European market is scheduled to see ECB rate decision, deposit facility rate and ECB marginal lending facility data and retail sales data in US market hours. Expected support and resistance for the pair are at 1.1820 / 1.1840 / 1.1890 and 1.1790 / 1.1750 / 1.1750 respectively.