EUR/USD Price Forecast – EUR/USD Range Bound Ahead of US CPI Data Release

The EURUSD pair is trading in range bound fashion near overnight lows having faced rejection near the 1.1400 post which the pair took a sharp downside move settling well below mid 1.13 handle. The US Dollar reversed a major part of its early losses following the release of hotter than expected core PPI figures and turned out to be one of the key factors behind the pair’s overnight decline. The shared currency was further weighed down by Italian finance minister Giovanni Tria’s comments that the government won’t make major changes to the budget, which revived concerns over Italy’s budget deadlock with the European Commission. However the pair stabilized near previous session’s lows on Sino-U.S. trade talk related optimism.

Macro Data & Political Headlines To Keep Volatility High Across The Day

US President Donald Trump told Reuters that he would intervene in Huawei case if that helps him crack a trade deal with China. He added further that negotiations are already happening over the phone and if necessary, he would meet President Xi Jinping again. Trump’s comments likely boosted hopes of US-China trade tensions and pushed up equities. The Asian heavyweights like Nikkei, Shanghai Composite and S&P ASX 200 all reported gains. As a result, the haven demand for the US dollar weakened in Asia putting an end yesterday’s sharp fall. As of writing this article, the EURUSD pair is trading at 1.333 up by 0.13% on the day.

On release front, European markets will see release of Industrial production data while US markets will see release of Core CPI & Crude Oil Inventories data. Today’s price action will be highly influenced by ongoing political issues in Europe and US macro data both of which will provide considerable volatility in market. When looking from technical perspective, The EUR/USD pair is mildly bid in Asian session having defended the support of the trend line connecting the Nov. 13 and Nov. 28 lows yesterday. While the pair may have averted a deeper sell-off with the defense of the rising trend line, a bullish reversal would be confirmed above the 55-day moving average (MA) hurdle. A close below the rising trend line support, currently at 1.1314, would signal a downside break of the symmetrical triangle – a bearish continuation pattern – and open up downside toward 1.1215-1.12 price range.