EUR/USD Price Forecast – EUR/USD Recovers on US Greenback’s Weakness

Investors ignore upbeat comments from Fed’s Powell, T-yield remain flat-lined
Colin First
EURUSD Thursday
EURUSD Thursday

The recovery rally in the EUR/USD gathered pace in Asian market session as the US treasury yields remained unchanged near monthly lows despite upbeat comments from Fed’s Powell. The US 10-yr treasury yields initially rose from 3.13% to 3.16% but dropped during the NY afternoon to 3.09% on Wednesday. The dollar was lower due to this on Wednesday’s American market hours and fell a full point to 96.80 with the US 10 years being the lowest so far this month. EURO bulls have capitalized on this news and made some serious recovery and as of writing this article, the EURUSD pair is trading at 1.1338 up by 0.043% on the day.

Investors Await US Retail Sales Data For Direction Cues on EURO’s Medium Term Outlook

The pair is now attempting to break 200 hour moving average and a breakout seems highly likely as EURO bulls are very active in Asian market hours as markets continue to ignore Powell’s positive take on the US economy. This is evident from the fact that the 10-year treasury yield hardly moved after Powell’s comments and continues to roll in a sideways manner around 3.12%. Further, the bullish pressure around the EUR could strengthen if the GBP/USD cheers the draft Brexit deal. But this scenario is highly unlikely as analysts and investors expect UK parliament to reject PM May’s 586-page draft.

On the release front, European market will see the release of Trade balance data but the data will have very little impact on price action. In US market for the day, investors will see the release of US Retail sales data, crude oil inventories data, Philadelphia Fed Manufacturing Index and Another speech from Fed Chair Jerome Powell. An above-forecast US retail sales, due at 13:30 GMT, could lift the Treasury yields, pushing the US dollar higher across the board. Expected support and resistance for the pair are at 1.1320, 1.1300, 1.1282 and 1.1350, 1.1370, 1.1390 respectively.

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