EUR/USD Price Forecast – EUR/USD Range Bound With Positive Bias As Sino-U.S. Talks Extend For Third Day

EUR/USD pair trades in a consolidative price action sandwiched between weekly high and lows of 1.14 handle. The pair which is already trading range bound trapped within wider price band limits over cues from global political and economic scenario is now seeing relatively neutral price action this week owing to two of key geo-political events being formally addressed by respective parties. The week started on positive note for the major, however a modest rebound in US Greenback backed by climb in US Treasury Yields post Fed Chair Powell’s comments last week and weaker fundamentals owing to worse than expected German and Euro Zone macro data had caused EURO to decline significantly yesterday. After four consecutive bullish trading sessions, EUR/USD pair closed dovish yesterday, however the pair is still moving in upper half of 1.14 handle aiming to breach long term resistance at 1.1498 handle.

Both Sides Lack Solid Breakout Trigger

Risk appetite remains high in market for third consecutive session on Sino-U.S. trade talk related optimism. While the talks extended for third day without prior announcements, US President Donald Trump’s tweet stating that talks are proceeding in favorable direction has boosted investor sentiment in global market. According to report from Wall Street Journal, trade talks have narrowed down differences between two parties, while Reuters stated that progress has been made on topics related to increased market access for US products in Chinese markets and purchase of U.S. farm and energy products but no progress seems to have been made in regards to key structural reforms expected by US. Greenback is also weighed down in market with yesterday’s recovery doing little to change overall price dynamics as political woes continue to escalate in USA amid partial shutdown of government and televised war between Democrats and Republicans which has left the citizens highly irritated. A lack of solid trigger to help facilitate a breakout on either side in a risk on trading scenario has caused the major to slightly recover from yesterday’s loss but remain locked in range bound price action.

As of writing this article the EURUSD pair is trading near flat at 1.1456 up by 0.14% on the day. Traders have made best use of short term opportunities to book profits and are now waiting for release of FOMC Meetings Minutes scheduled to release later today to provide next short term opportunity while major focus continues to remain on Sino-U.S trade talk outcome which will decide immediate and medium term outlook of price action in all major global economies. When looking from technical perspective, the pair shows signs of bullish breakout at price action remains stable above mid 1.14 handle well near long term resistance at 1.1498 mark, a break above which will signal Euro’s dominance in near term market. RSI & Stochastic momentum indicators in one hour, four hour and daily chart are moving near oversold region but yet to breach oversold territory while the price is moving well above 20, 50 and 100 moving averages in all three charts mentioned above which suggests that path with least resistance today is on upside.