EUR/USD Price Forecast – EUR/USD Likely to Consolidate

The EURUSD pair has been moving higher over the last 24 hours but the move higher has not been very convincing and the move is also not based on fundamentals as yet. Years in the market would teach traders and investors that moves that are not based on fundamentals and those that follow some major moves are more of a correction of the moves that preceded them rather than any specific moves that lead to a change.

EURUSD Lower

We believe that the current move higher in the euro is also something of the same and with that in mind, we can view this only as a correction of the downtrend at this point of time. We are likely to see this move reversed in due course of time and at that time, it is important to notice the price action to see if the price would sustain the lows of the current range or whether it would break further below. We believe that there would be a lot of buying support in the region near 1.15 and that is the reason why we also believe that the prices would continue to consolidate.

The euro has been weakened by the stance of the ECB which has made it clear that the QE would continue for the rest of the year and this put paid to the hopes of many traders and the euro bulls who had expected a quick end to the QE. Also, the euro has been forced on the backfoot by the hawkish stance of the Fed which has gone about its plans for rate hikes in a hawkish manner and it also plans to add more rate hikes in the coming months, in a stand that is opposite to what the ECB had been undertaking. This shows the economy of the US in good light which has added to the dollar strength.

Looking ahead to the rest of the day, there is a speech from Draghi later in the day but considering the fact that he rarely speaks out of turn, we do not expect much fireworks around this speech. We expect a bearish consolidation for the rest of the day.