EUR/USD Price Forecast – EUR/USD Trades Positive As UK MP’s Voted To Delay Brexit

Increased risk appetite underpins EURO bulls on positive momentum ahead of Euro area macro data update.
Colin First
EUR/USD

The EURUSD pair yesterday saw a two-way price action as market momentum was influenced by headlines driven investor sentiment. Risk appetite was high across the day which helped EURO stage positive price action early in the day but news of delay of the meeting planned between Chinese & U.S. presidents to sign a trade deal later this month to April caused investor sentiment to turn cautious in late European market hours. This caused the pair to decline slightly, however, focus still remained on UK parliament vote for article 50 deadline extension which was already priced in by the majority of global traders.

Brexit Deadline Extension Support EURO Bulls

The outcome of parliament vote was in favor of deadline extension but the timeline for delaying deadline hasn’t been decided yet as PM May hopes to convince UK lawmakers one last time on March 20, before all EU members meet on March 21, 2019. If PM May manages to convince UK lawmakers to accept her deal there will be a definitive delay by 2 months while the third rejection by lawmakers will result in the requirement for deadline being pushed by a longer time frame. However, the ultimate decision to delay deadline rests with EU members and all EU members need to agree for delaying the deadline when they meet next week. Hopes for Brexit delay and easing concerns of Sino-U.S. trade talks owing to lack of follow up headlines helped EURUSD gain momentum later in the day and the pair has since maintained a rangebound price action near overnight highs.

As of writing this article, EURUSD pair is trading at 1.1324 up by 0.19% on the day. Investors now await macro data updates for directional cues as the trading session comes to close for the week. On the release front, EU calendar will see the release of Italian CPI & HICP and Euro area CPI data while US calendar will see the release of Industrial production data, JOLTs Job Openings, Michigan Consumer sentiment, and Michigan Consumer expectation data updates. When looking from a technical perspective, the path with least resistance is towards the upside given favorable proceedings on Brext front in UK parliament and high-risk appetite in the broad market. Expected support and resistance for the pair are at 1.1300, 1,1250/45, 1.1215/05 and 1.1350, 1.1370, 1.1400 handles respectively.

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