EUR/USD Price Forecast – EUR/USD Turns Dovish On Post Holiday Season Market

The EURUSD pair traded choppy on last trading session of 2018 albeit bullish bias favoring Common currency owing to weak US Greenback and holiday thin trading volume. The American currency had lost its shine last month owing to multiple factors such as dovish comments from US Federal Reserve Chairman Jerome Powell who stated that interest rates were close to neutral and FOMC choosing to hike interest rate twice in 2019 despite slowdown in US & global economies and lastly a partial government shutdown owing to President Trump’s refusal of budget extension unless it had provision for funding border wall between US & Mexico.  While above mentioned factors have been a thorny issue for all investors Greenback could resume its upper hand against global currencies in case China & US manage to form a trade deal as this was the major factor that triggered global economic slowdown.

Macro Data Unlikely To Provide Breakout Triggers

When market moves higher, economy grows and such a situation will once again go back to pressuring emerging markets as growth in US markets backed by Fed rate hikes will boost Greenback’s value and long term outlook in global market. EUR/USD heads into 2019’s first European market session struggling to hold onto 1.1450 as Wednesday sees the US Dollar take a leg up, with broader market sentiment twisting towards the downside. However thin market volumes and restrained trading outside of the Pacific sector is seeing the Fiber still buried deeply within familiar levels. As of writing this article, EURUSD pair is trading at 1.1453 down by 0.10% on the day. EURO suffers significantly as soon as trading session resumed normal activity owing to political and economic issues that continue to weaken European markets which clearly indicate that bullish price action from recent past was dictated by broad based US Greenback’s weakness.

EU is taking a serious hit dealing with overblown government budgets from Italy and France, while also trying to keep a close hand on the runaway Brexit scenario. As political discourse within Europe continues to remain in tense scenario owing to this month seeing many critical events being addressed across the globe, the pair has high chance to see two way price actions. On release front, macro calendar remains relatively silent on both sides of Atlantic. Both sides of the pair see release of respective economy’s Manufacturing PMI in respective market hours. When looking from technical perspective, Post-holiday market volumes continue to lend themselves to twitchy price action and trading activity is expected to remain choppy in near future owing to high impact news and event filled calendar schedule. Expected support and resistance for the pair are at 1.1425, 1.1390, 1.1355 and 1.1485, 1.1525, 1.1560 respectively.