EUR/USD Price Forecast – EURO Consolidates Hold Over 1.13 Handle

The EURUSD pair traded positive for four consecutive trading sessions despite seeing a high level of volatility on Brexit headlines and macro data updates. The US dollar’s weakness over mixed macro data outcome in US economic calendar also helped the EURO with its steady upside momentum while Brexit uncertainties continued to limit gains in the upside. During yesterday’s trading session despite subdued opening, the pair saw steady upside price action across the day with EURO bulls being supported by weak USD in early half and expectations for UK parliament to avoid no-deal Brexit and disappointing US macro calendar updates supporting EURO bulls in the latter half of yesterday’s trading session. The EURUSD pair managed to reverse all loss suffered from after last week’s dovish ECB update and moved well near mid 1.13 handle.

UK Parliament Updates Continue To Remain Main Driving Force For Bulls

But as investors remain cautious over proceedings of Brexit related discussions in UK parliament, they held back from placing major bets resulting in the pair failing to capitalize on yesterday’s positive momentum. Further, EURO bulls lacked the strength to establish a stable rally near previous session highs and this resulted in pair seeing a slow decline. However, EURO bulls remain well supported owing to increased risk appetite and positive investor sentiment and this helped prevent the pair from declining back below 1.1300 handle during Asian market hours. Ahead of European market opening, The pair has achieved stability above1.13 handle despite seeing slight declines leading to consolidative action near 1.1315-1.1325 handle ahead of European market hours. As of writing this article, EURUSD pair is trading flat at 1.1324 down by 0.01% on the day.

Investors now await UK parliament session updates for the outcome of the vote on the extension of article 50 deadline. Despite disagreements from PM May’s party members UK parliament yesterday successfully voted to avoid no-deal Brexit. While there is a vote in UK parliament today to delay Brexit deadline it is only possible if PM May’s Brexit deal had been approved and now that the deal has been rejected, given EU’s clear stance that they are prepared for both no-deal outcome or exit with a deal between two parties but the deal has to be the one agreed between EU & UK PM May, lawmakers have very less options to work with and the one thing that could save them now is moving to initiate second Brexit referendum and avoiding Brexit altogether. This makes the outcome of today’s parliament meeting a key turning point in Brexit and hence all eyes remain on the meeting. Ahead of the UK parliament meeting, investors look to macro data updates for short term profit opportunities. On the release front, EU calendar sees Germany & France CPI & HICP data while the US calendar sees the release of import and export price index and new home sales data. Expected support and resistance for the pair are at 1.1300, 1.1265, 1.1220  and 1.1350, 1.1375, 1.1410 respectively.

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