EUR/USD Price Forecast – Euro Rangebound Post Overnight Declines.

The EURUSD pair yesterday saw steady downward price action for the majority of the trading session. The downside price action was initially influenced by German government bonds which still remain in the pit. However, the downside move got a boost when European central bank governor Mario Draghi reiterated ECB’s dovish stance and concerns of an economic slowdown. Meanwhile, US Dollar bulls had also been gaining strength in the market supported by a recovery in US Treasury yields. A positive US trade balance data during late European market hours cemented US Dollar’s dominance over price action resulting in the pair moving all the way below mid 1.12 handle.

Draghi’s Dovish Outlook Continues To Pressure EURO

But the downside price action was capped owing to strong support slightly below the mid-1.12 handle. The pair rebound from overnight lows of 1.1242 but lack of strength for recovery rally has left the price action range bound slightly above mid-1.12 handle during Asian market hours. As of writing this article, EURUSD pair is trading flat at 1.1260 up by 0.12% on the day. German government bond yields are still in pit resulting in US-German spread yields remaining in favor of EURO’s declines. Price action clearly shows investors reluctance to place bets in favor of Euro as key central bank figures repeatedly reiterate and stand by their dovish outlook resulting in risk-averse trading activity.

Investors now await macro data updates for short term profit opportunities. The macro calendar lacks major updates until the latter half of European market hours. On the release front, EU calendar will see the release of German CPI & HICP data while the US calendar will see the release of Q4 GDP data, Initial Jobless Claims and Pending home sales data. When looking from the technical perspective, the path with least resistance moving forward is to the downside. To the downside, the pair faces strong support at 1.1240, 1.1200, 1.1183/74 handles while to the upside the pair faces strong resistance near 1.1290, 1.1331, 1.1389 handles respectively.

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