EUR/USD Price Forecast – EUR/USD Edges Down As German Finance Ministry Cautions Slow Economy Growth

The EURUSD pair yesterday remained well above 1.14 handle and hit an intra-day high of 1.1425 market and maintained some modest gains for majority of the session. But the pair has fallen back below 1.14 handle during Asian market hours today, as the pair lacks support to remain steady above 1.14 handle. The pair has fallen below 1.1400 mark twice so far within last 24 hours indicating that the pair may have found considerable resistance and is losing steam on its bull run. The move upside yesterday in north American market hours was supported by weakened US Greenback in broad market following disappointing US economic data (durable goods order) that came in well below expectations. Greenback was further weighed down by rumors that the Federal Reserve could halt its tightening cycle during spring weigh on the greenback.

Investors Await ECB Minutes For Directional Cues in a Holiday Thin Market

Italian bonds rose, offering support to the move higher of EUR/USD but the common currency failed to hold above 1.14 mark as the German Finance ministry cautioned about growth continuing at a slower pace looking forward. As of writing this article, EURUSD pair is trading in a consolidative price action at 1.1395 up by 0.10% on the day and has remained above 1.1390 mark in Asian market hours as risk appetite remains high today morning. On release front, European markets will see release of ECB’s Monetary policy account but US markets are on thanks giving holiday which greatly limits liquidity and volatility during today’s market hours.

When looking from technical perspective, the EUR/USD charted an inverted bullish hammer yesterday, squashing hopes of bearish outside-day reversal. While a bearish reversal has been avoided, the bulls are not out of the woods yet.  Moreover, they are seen gaining control above 1.1472 (high of Tuesday’s bearish outside-day). That move may happen before Friday’s NY close if the ECB minutes due today, downplay the recent slowdown in the economy and Italy concerns and reaffirm commitment to end the QE program in December. The crucial support of 1.1359, however, would come into play if the ECB minutes show policymakers are worried about the rise in Italian bond yields and are considering abandoning plans to end the QE program in December. The selling could be intense if minutes squash expectations of late 2019 rate hike.