EUR/USD Price Forecast – EUR/USD Consolidates Near Overnight Lows

USD continues to dominate price action amid a lack of high impact macro data updates and headlines.
Colin First
EURUSD Tuesday
EURUSD Tuesday

The EURUSD pair continued its bearish price action for yet another session and during yesterday’s American market hours fell below the critical support level. US dollar managed to pull the price down well below 1.1300 handle which now puts the pair well in bears territory with multiple critical resistance price levels that are not easy to breach. While there was no major economic release in the U.S. last night and dovish fed stance on rate hikes continues to limit upside move, yesterday’s sharp boost in 10-year bond yields which went up nearly 1% during U.S. trading session helped US Dollar gain strength in the broad market. While risk appetite in the broad market helped limit the pair’s decline, the US dollar continues to dominate price action of most major Forex currencies including EURO.

Bearish Factors Assault EURO on Multiple Fronts

Further concerns of the outcome of the EURO’s trade talks with the U.S. also weighs down common currency as talks are yet to begin but investors now fear that in addition to tariff card, U.S. could use E.U.’s trade with Iran and threat of preventing access to U.S. markets as another card to force E.U. to accept trade demands or pursue a trade war which could further damage EURO economy. This is considered a dovish factor for the common currency and is expected to be discussed in today’s E.U. Finance Ministers Meeting, the outcome of which could provide EURO bulls strength for short relief rally. As of writing this article, EURUSD pair is trading flat at 1.1284 up by 0.08% as mid-1.12 handle acts as strong support and pair is now consolidating near yesterday’s lows.

There are no major macro data updates on both sides of the Atlantic. While E.U.’s calendar is completely silent for the day, U.S. markets will see the release of JOLTS Job Opening data and speech from Fed Chair Jerome Powell which could provide some short term profit opportunities and help US Dollar attempt to breach support near mid-1.12 handle. When looking from a technical perspective, nothing much has really changed and path with least resistance is towards the downside. Price action is well below 20, 50 & 100 MA’s in intra-day hourly and daily charts and momentum indicators RSI & Stochastic are also seeing their signal line move well near oversold territory suggesting downside price action is expected to continue for rest of the day.

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