EUR/USD Price Forecast – EUR/USD On Uptrend Move Supported By Fall in IT-DE Spread Difference

The EUR/USD closed well above 1.1388 yesterday, validating Wednesday’s bullish outside-day candle. The pair which was trading flat overnight got a bullish boost following release of FOMC minutes for November which helped the pair breach 1.1390 handle during North American market hours. As we come to last trading session of the week, the pair seems to be trapped in a range between 1.1350 to 1.1410 mark as impact from Fed Chair Jerome Powell’s speech on Wednesday still has some lingering influence on price action of US Dollar denominated pairs.  Meanwhile the common currency is also gaining fundamental support on its price action from continued fall in Italy-German yield differential in favor of Euro bulls.

Euro Bulls Continue To Ride Lingering Positive Influence From Powell’ Speech

As of writing this article, the EURUSD pair is trading flat at 1.1391 up by 0.07% on the day. Italy’s willingness to amend the budget is being well received by the bond markets. The spread between the 2-year Italian government bond yield and its German counterpart fell to 238 points yesterday – the lowest level since Oct. 1 – having topped out at 358 basis points on Nov.8 which greatly boost the already existing positive technical setup with solid fundamental support for the common currency. The pair now aims for a re-test of the Nov. 20 high of 1.1472.

However the common currency may run into some resistance during Asian session on Monday if the weekend’s Trump-Xi meeting fails to produce at the very least a pause in the trade dispute, while the target of 1.1472 could be scaled next week if the meeting between the US President Trump and China’s Xi ends on a positive note. On release front, European calendar is very busy with release of German retail sales data, French CPI & HICP data, Italian CPI & GDP data and Eurozone CPI data and unemployment rate data while US calendar is relatively silent except for release of Chicago PMI & US Baker Hughes Oil Rig Count data. Expected support and resistance for the pair are at 1.1360, 1.1325, 1.1300 and 1.1400, 1.1420, 1.1460 respectively.