EUR/USD Price Forecast – EUR/USD Trades Range Bound Amid Political Woes From Both Sides of AtlanticEUR/USD is trapped in a symmetrical triangle as brexit woes and French protests hurt Euro’s upward price momentum.
The EUR/USD pair created a bearish outside reversal on Monday and failed to pierce the upper edge of the symmetrical triangle on renewed Brexit uncertainty. UK PM May delayed a highly anticipated vote on the exit deal, which she agreed with the European Union (EU). The renewed uncertainty pushed the British Pound down to its lowest level since April 2017 and weighed over the risky assets resulting in the American dollar picking up safe haven bid in broad market. Moreover, the probability of a hard Brexit may have increased significantly in the last 24 hours. So, the risk assets may remain under pressure until more clarity emerges on Brexit. As of writing this article, EURUSD pair is trading at 1.1367 up by 0.11% on the day. Euro was also weighed down in broad market to some extent yesterday bas French President Macron declared state of economic emergency during his speech to French citizens in regards to yellow vest protests.
President Donald Trump Fears Impeachment
The narrowing US-De yield differentials, however, may restrict the downside in the EUR/USD. At press time, the spread between the US 10-year yield and its German counterpart is seen 260 basis points – the lowest level since Oct. 1. Further, the European and American Forex desks may offer US dollars in response to reports stating that President Donald Trump is fearing impeachment after Democrats take over the House. The talk of impeachment has gathered pace in recent days following a filing from prosecutors which alleged that Trump committed an impeachable offense by directing Cohen to break the law during the 2016 presidential campaign.
When looking from technical perspective, overnight sharp retracement turned a near-term bullish breakthrough into a fake-out. A follow-through weakness below the 1.1350-45 region will further reinforce the false breakout and accelerate the slide towards another ascending trend-line support, currently near the 1.1300 handle. On a sustained weakness below the mentioned support would turn the pair vulnerable to head back towards challenging yearly lows, around the 1.1215 region. On the flip side, the 1.1400-10 region now becomes immediate strong resistance to conquer, above which the pair is likely to aim towards reclaiming the key 1.1500 psychological mark.