EUR/USD Price Forecast – EUR/USD Holds Fort at 1.16 Handle Post Seehofer’s Comment

The EURUSD pair got a 30 pip boost post Germany’s Seehofer comment that a clear solution to stopping illegal immigration at the German-Austrian border has been agreed upon during his meeting yesterday with Chancellor Angela Merkel. The pair hit yesterday’s low at 1.15900 during late North American market hours but recovered uptrend movement post news update from Germany. Merkel and Seehofer met on Monday in the office of Bundestag president Wolfgang Schäuble, with Schäuble mediating in the dispute and came to a compromise for the management of migrants coming to Germany and Seehofer said he would stay in his ministerial post. Representatives of the three elements of the coalition, the CDU, CSU and SDP are meeting to discuss the agreement.

EURUSD Consolidates

Both European and US markets had mixed macro data outcome on Monday and it had little effect on the pair as investors were focused on German political proceedings. US market hours saw the pair taking slight downtrend movement but the same was reversed before the session came to close and pair has managed to remain stable above 1.16 handle. Trump told the World Trade Organization on Monday that “we’ll be doing something” if the United States is not treated properly, just hours after the European Union said that U.S. automotive tariffs would hurt its own vehicle industry and prompt retaliation. In China, the epicenter of the international trade row, have warned the United States that the tit-for-tat tariffs on each other’s goods will ultimately prove detrimental for American businesses and jobs.

However there seems to be no-change in President Trump’s “America First” approach which is causing tremendous pressure to US Greenback. On schedule in macro calendar for the day, Euro zone is set to see retail sales and PPI data while US markets would see durable goods and factory order data. With plenty of short building up, there is the potential for a short squeeze and eyes will be on US yields, (lower/caped) due to demand for US Treasuries in soured risk-off markets. The broader range remains between 1.1500 and 1.1850 handles with immediate resistance found around 1.1700 handle and support at 1.1550 handle respectively.