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The EUR/USD pair, which spent the majority of yesterday fluctuating above the 1.13 handle, came under pressure in the NA session and fell to its lowest level since November 15 at 1.1278 before going into a consolidation phase.

The Greenback also received additional support from hawkish comments made by Richard Clarida, the Federal Reserve Vice Chairman. Meanwhile the common currency also faced pressure from news of Italy’s plans to bring the deficit target down to 2% in a report by Reuters which was later contradicted by Italy’s ruling party La Lega’s economic adviser, Armando Siri who said that the government was considering to reduce the budget deficit to 2.2% or 2.3%.

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EURO is Trading Range Bound Slightly Above Overnight Lows

However, the news that Italy is looking to change the budget deficit target is positive news for EURO bulls as it can be interpreted as a signal that negotiation between EU & Italy on budget woes are moving in a favorable direction. As of writing this article, EURUSD pair is trading near neutral levels at 1.1298 up by 0.09% on the day. Moving forward, Investor focus is on a speech by Fed Chair Powell in which investors look for his stance of rate hikes for 2019. The bid tone surrounding US Greenback may increase is Powell reaffirms gradual path of tightening and says the rates would have to move above the neutral level, but there is also a chance for a decrease in bid tone if he emphasizes on the rising risks to US economy.

On the release front, aside from speech by Fed Chair Powell US markets will see the release of US Q3 Preliminary GDP data, new home sales data, Goods trade balance for October and Crude oil inventory data all of which have hawkish forecast.

On European markets, the calendar is silent for the most part aside from GfK German Consumer Climate data which is forecast to see slightly lower data when compared to previous reading. When looking from a technical perspective, the daily chart sees the price move in a bear trend below the 200-day simple moving average, while in 4-hour chart the RSI is below 50 marks and the Stochastic indicator is also in deeply oversold territory indicating continued bearish price action in near future.

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