EUR/USD Price Forecast – EUR/USD Scales 1.13 Handle On Prospects Of Summer Rate Hike

The EURUSD pair yesterday staged a splendid recovery rally with price action gaining bullish bias through late European and U.S. market hours. While the trigger for recovery rally was obtained from the subdued dollar in broad market as US Greenback lost ground in the broad market following profit booking activities post 7 consecutive sessions of a strong rally, the main reason that influenced upside action was optimism surrounding trade deal between China & U.S.A. Market bulls receive strong support on hopes that upcoming trade talks between two nation are likely to end with trade deal between two nations.

Sino-U.S. Trade Deal Optimism Boosts EURO Bulls

The positive sentiment surrounding trade talks and the deal between two nations were further reinforced on reports which stated that US President Donald Trump is open to waiving March 1^st deadline in case the talks show potential for the possibility of a trade deal between two nations. Further, positive comments from ECB members Jens Weidmann, President of the Deutsche Bundesbank and Governing Council member Nowotny who downplayed economic slowdown in euro area activity and hinted at a possibility of reconsidering rate hike plans for 2019 in summer added strong fundamental support to EURO bulls enabling the pair to stage steady positive price rally. As of writing this article, EURUSD pair traded at 1.1332 up by 0.08% on the day in a consolidative action as it found strong resistance near the mid-1.13 handle.

Sino-U.S. trade deal optimism is expected to help bulls stay above 1.13 handle while investors wait for today’s macro data updates which could provide directional cues and meaningful trading opportunities for rest of the day. On the release front, EU calendar will see the release of industrial production data while the US calendar will see the release of building permits and core CPI updates. When looking from a technical perspective, the path with least resistance moving forward is to the upside. The price action is well above 20, 50 and 100 moving average in hourly charts while RSI & Stochastic momentum indicators are moving well in line with the overbought region in hourly intra-day and daily charts suggesting that upside move is likely to continue in near future. Expected support and resistance for the pair are at 1.1350, 1.1372, 1.1395 and 1.1310, 1.1297,1.1255 respectively.

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