EUR/USD Price Forecast – EUR/USD On Consolidative Action Ahead of PMI Updates

The EURUSD pair is now on the path for a steady downward decline. Having declined below 1.15 handle earlier last week, bears seem to have taken control of price momentum. The week started on dovish note for EURO, as dollar seemed to have retained its momentum from Friday’s upbeat macro data influenced rally. Further disappointing Euro area PPI data weighed on investor sentiment. However holiday thin market limited losses early in the day. But US Dollar bulls managed to gain further ground against common currency on positive influence gained from the spike in 10-year U.S. Treasury bond Yields during American market hours. However, US Dollar was unable to make any sharp turnaround in price activity as USD still suffers from the dovish fed update.

U.S. & E.U. PMI’s Eyed For Directional Cues

Concerns of a slowdown in Euro area economic activity is beginning to have a serious impact on EURO bulls in the broad market. Further political tensions added to existing bearish pressure which is also fuelling the ongoing bearish price rally. At end of yesterday’s trading session, bears had managed to drag to pair down below mid 1.14 handle and the pair has since maintained a consolidative price action. Asian session is unlikely to cause any major moves today or tomorrow owing to reduced activity as China & Singapore markets are closed on account of Chinese New Year and Spring festival celebrations. As of writing this article EURUSD pair is trading flat at 1.1433 down by 0.02% on the day. Given current market conditions, the ongoing bearish rally is expected to continue for quite some time.

Moving forward, investors are focused on today’s macro data update for short term profit opportunities and directional cues. On the release front, European calendar sees the release of retail sales data, Services & Markit Composite PMI for Euro area and Services PMI from German & French market while the U.S. calendar is expected to see the release of ISM Non-Manufacturing PMI, Markit Composite, and Services PMI data updates. In the European market, PMI’s are forecast to remain unchanged, retail sales data is expected to show a sharp decline in value. On the other hand, today’s most awaited U.S. Non-manufacturing PMI is forecast to see a drop in value. A positive outcome in U.S. macro data updates will help the pair retain ongoing price action while worse than expected outcome will push it back above mid 1.14 handle which could put a bit under EURO in immediate and near future trading sessions.  Expected support and resistance for the pair are at 1.1425, 1.1419/18, 1.1390 and 1.1438/40, 1.1445, 1.1452 respectively.