EUR/USD Price Forecast – EUR/USD To Trade Positive But Remains Locked In Wider Price Band Limitations

EURUSD pair continues range bound price action as trading activity began for second week of January 2019. The pair has been locked in a wider price band since month of October 2018 as geo-political and economic issues continue to impact global economy. While proceedings in various events provided high level of volatility and plenty of opportunity for short term profit activity for traders, the medium to long term performance could be viewed as subdued action as neither bulls nor bears managed to make a strong breakout owing to lack of decisive triggers. Such a decisive trigger could be expected this month as some of the key issues that impacted European and global economy are being addressed this month.

Risk Appetite High On Powell’s Comments At Start of Event Filled Week

The pair saw some downward price action on better than expected US NFP data and worse than expected Euro area macro data outcome. However investors remain focused on key events of this week namely – Brexit parliamentary approval and Sino-U.S. trade negotiations both of which are set to begin today. Market continues to receive positive influence from Chinese central bank’s monetary policy easing which is further supported by positive sentiment surrounding investors hopes of favorable outcome in Sino-U.S. trade talks which is seeing first face to face interaction post President Trump & Xi Jing Ping’s agreement last month during G-20 summit for a 90 day pause to ongoing tariff-war between them.

The US Greenback also lost ground against the major as Friday’s speech saw Fed Chair Jerome Powell state that rate hike plans for 2019 are not fixed and could change based on macro data outcome & economic scenario signalling that Fed is ready to pause rate hike if needed boosted equity market performance and also added substance to increased risk appetite which market is experiencing today. As of writing this article, EURUSD pair is trading at 1.1425 up by 0.28% on the day having once again regained stable foothold above 1.14 handle despite Friday’s decline which suggests strong support at said price handle. Moving ahead today’s calendar is filled with macro data releases across European & American market hours which are expected to keep price action highly volatile but there is no sign of any trigger that will help the pair breach wider price band limitations. The pair will continue to trade range bound with momentum favoring common currency during today’s market hours.