EUR/USD Price Forecast – EUR/USD Pair Trades Range Bound Ahead of EU GDP Data ReleaseAn above-forecast German CPI and Eurozone GDP could bode well for the common currency.
The EUR/USD pair is trading in a range bound fashion over North American and Asian market hours as news hit the market that Angela Merkel is to step down as German Chancellor in 2021. The pair hit 1.14 handle twice over volatility from news of Merkel stepping down during North American market hours but the 100 hour moving average provided a high level of resistance dampening the common currency’s momentum which then fell to 1.136 handle. But the pair has since made a rebound move and is trading range bound around 1.138 handle as investors now look forward to highly volatile European market hours which is scheduled to see macro data updates on multiple fronts. The risk sentiment likely stabilized in Asia and as of writing this article, the pair is trading near flat at 1.1380 up by 0.07% on the day.
Macro Data Update Holds The Key to EURO’s Price Momentum Today
On release front today, there are updates in German, France as well as Euro zone’s calendar. German calendar is scheduled to release Unemployment data, CPI & HICP data, French calendar is scheduled to release Preliminary GDP & Consumer spending data while EZ’s calendar is scheduled to release Preliminary GDP data as well. On other side of Atlantic, US calendar will see release of CB consumer confidence data for October which is forecast to have dovish readings. An above-forecast German CPI and upbeat Eurozone GDP could boost demand for the EUR. However the common currency could still face a bout of bearish pressure if the Italy-German yield spread spikes, representing rising concerns about Italy’s budget.
When looking from technical perspective, The 100 hour MA of 1.1397 is the level to beat for the EUR bulls. This is because the key MA acted as a stiff resistance in the last three days. The bearish pressure around the common currency will likely wane, if the pair convincingly beats 100 hour MA hurdle. That could happen today as the currency pair charted a bullish RSI divergence on the 4-hour chart yesterday. For now as the pair continues to move below the 100 hour MA, sellers will have higher degree of control over the pair’s price action. If the pair gets a bullish trigger from macro data update in European or US market hour and breaches the 100 hour MA the bias for price action will turn bullish but upside will continue to remain capped over resistance at 200 hour MA around the 1.441 handle.