EUR/USD Price Forecast – EURO Rangebound Amid Lack Of Directional Cues Near Mid-1.12 Handle

The EURUSD pair last week saw one of its most sharp dovish declines which resulted in the pair hitting multi-year lows. The decline saw price action of pair breach multiple critical support price levels and settle slightly above mid-1.11 handle a level not seen since June 2017 but mixed macro data outcome in US economic calendar gave the pair some breathing space helping the pair recover some of the lost ground and settle back above 1.12 handle. The price action continues to remain rangebound in 1.12 handle since the trading session began for the day as US Dollar remains weak in the broad market following Friday’s US macro data outcome resulting in EURUSD continuing its recovery rally.

USD’s Weakness Persists On Lingering Influence From Friday’s Macro Data Outcome

However, investors held back from placing any major bets ahead of macro data updates for the day as they await directional bias and wish to get a clear idea on USD’s strength in short to medium term outlook. The price action in the Asian session clearly suggests that EURO bulls lack the strength to make a recovery rally and ongoing price action is influenced by USD price dynamics. Traders will gain a clear understanding of EURO & USD’s short term outlook based on today’s price rally breakout and this is expected to set the pace for activity the week ahead. As of writing this article, the pair is trading unchanged at 1.1233 while investors await macro data update for directional cues.

On the release front, European calendar will see the release of German import and export, industrial production and trade balance data while US economic calendar will see the release of core retail sales data, business inventories data updates. Unless the pair breaches past mid 1.12 handle and manages to establish a stable upwards price action. For now, the pair seems to be trapped within a shorter price range of 1.1211 & 1.1245 with a bias favoring continued upside movement on USD’s weakness. When looking from a technical perspective, the pair is seeing price move well below 20, 50 & 100 MA’s in 4 hour and daily charts while RSI & Stochastic momentum indicators are seeing the signal line move parallel to but slightly above oversold region supporting possibility for range-bound price action in favor of EURO in short term. Expected support and resistance for the pair are at 1.1230, 1.1211, 1.1176 and 1.1250, 1.1285, 1.1300 respectively.