EUR/USD Price Forecast – EUR/USD Continues to Rise Up Despite Weak Macro Data on Weak US Greenback

EURUSD on Monday saw range bound momentum on early trading session but took to slight dovish movement on disappointing macro data release with German Info business climate index seeing lower than expected value at 101.8 which was previously at 102.2 and German current assessment was dovish as well. The dovish sentiment further intensified during later European and early American market hours on positive US home sales data. However US greenback began losing momentum during late North American session and early Asian market hours as trade war tensions hit new high over comments from U.S. Treasury Secretary Steven Mnuchin and White House trade and manufacturing adviser Peter Navarro resulting in Euro gaining momentum and US Greenback losing ground against major global currencies.

EURUSD Still Buoyant

U.S. Treasury Secretary Steven Mnuchin said on Monday that coming investment restrictions from the department will not be specific to China but would apply “to all countries that are trying to steal our technology.” that statement was contradicted by White House trade and manufacturing adviser Peter Navarro, who said that any investment restrictions proposed by the Trump administration would target China and not other countries. The dollar briefly pared some of its losses after Navarro’s comments but bearish sentiment surrounding US dollar continues to intensify as traders await fresh impetus before placing further bets in Greenback’s favor.

As trading session progressed further into Tuesday’s Asian market hours, the common currency capitalized on momentum gained from US Greenback’s weakness and breached psychological resistance level at 1.1675 handle making it new support as trading session moves further into the week. The EURUSD pair has moved well above 1.17 handle and is currently trading around 1.1707 handle with 0.03% increase in value. There are no major macro data updates in Euro zone during today’s market hours and the pair is expected to move forward purely based on influx from US Greenback / US dollar index movement. As investors have taken a risk aversion stance US dollar index hit new ten day low going below 94. This stance has also weighed on US Treasury bond yields with 10-year bonds seeing 0.7% decrease in value. On Euro zone, despite lack of macro data release, the common currency continues to face pressure as EURO is vulnerable from regional political instability in Germany. German Chancellor Angela Merkel faces pressure to deal with the migration dispute that has divided Europe and threatened her own government. The ongoing political angst in Europe is another factor that contributed to risk-off market sentiment. This sense of caution among investors over trade-related headlines in expected continue until July 6, 2018 when the Trump administration will announce its next moves on China which plays a major role in recent trade wars.