EUR/USD Price Forecast – EURO To Trade Positive On USD’s Weakness

The EURUSD pair last Friday saw a sharp fall in European market hours hitting multi-month lows as bearish factors piled up on one after another in the broad market. Worse than expected trade balance data served as a trigger for bearish price action. But Euro took a severe blow over comments of European Central Bank board member Benoit Coeure whose comments were highly in contrast to opinions expressed by other members earlier last week. ECB’s Coeure stressed on the impact of trade war on European economy and significant slowdown of economic activity in Euro area along with central bank’s plan to start a new – targeted long term refinancing operation (TLTRO) and this caused the pair to spiral to multi-month low and settling at 1.1233 handle post which the pair saw rebound price action.

Sharp Moves Unlikely on Silent Macro Calendar

While fundamentals are basically skewed to the downside for EURO, the pair closed positive on Friday and continued to trade positively in Pacific-Asia market hours owing to US Dollar’s weakness in the broad market. While US Dollar traded positive across the day, it weakened during American market hours owing to headlines and macro data-driven momentum. US macro data release on Friday saw industrial production decline by 0.6% while capacity utilization fell to 78.2% for the month of January. This along with news that US President Donald Trump declared a national emergency to divert government’s funds for building a border wall between US and Mexico gave the dollar a severe dovish blow on Friday dragging dollar down the scale on Friday.

Given the fact that the US market is closed today on account of President day celebrations, US Greenback remains dovish in broad market influencing positive price action in the broad market. As of writing this article, EURUSD pair is trading at 1.1311 up by 0.16% on the day. On the release front, the macro calendar is silent for both the US and Europe for the day. The price action moving forward is expected to be range-bound across the day with cues from headlines and broad-based sentiment surrounding the US dollar influencing directional bias. When looking from a technical perspective, the path with least resistance moving forward is to the upside. Expected support and resistance are at 1.1300, 1.1265, 1.1230 and 1.1325, 1.1351, 1.1409 respectively.

Please let us know what you think in the comments below