EUR/USD Price Forecast – Overnight USD Rebound Re-Established Greenback’s Dominance On Price Rally

The EURUSD pair yesterday saw sharp two-way price action influenced by the strength of the US Dollar in the broad market. Subdued US dollar combined with strong fundamentals backed by optimism surrounding Sino-U.S. trade talks and comments from U.S. President Donald Trump helped EURO stage solid gains early in the day. However, news hit the market that Span’s government lost the budget vote and paved way for early elections. This took the wind out of EURO bulls during the Euro-American market session. Further better than expected U.S. CPI data helped the US dollar regain its positive price rally and this resulted in pair seeing sharp downside price action during overnight trading hours.

Cautious Investor Sentiment Seals EURO Bulls Momentum

The pair rebound from overnight lows but still trades range-bound below a critical price level. As talks are set to begin between China & U.S.A today investors took a cautious stance and investors also wait for updates on today’s UK parliament session. This has resulted in USD re-establishing its dominance over price action. As of writing this article, EURUSD pair is trading at 1.1280 up by 0.12% on the day. Investors are now looking forward to headlines on political events and macro data updates for meaningful trading opportunities. Today’s macro calendar is filled with the second tier macro data updates on both sides of Atlantic which is expected to make European and U.S. market hours highly active and volatile today.

European macro calendar will see the release of Preliminary GDP data from Germany and Euro area along with Euro area employment change update, while US macro calendar sees the release of Core retail sales, PPI and business inventories data. When looking from the technical perspective, the pair is now in bears territory and further downside action is highly likely as price is moving well below 20, 50 & 100 MA’s in hourly intra-day and daily charts, while momentum indicators RSI & Stochastic are seeing their signal line move slightly above but parallel to oversold region. Expected support and resistance for the pair are at 1.1271, 1.1248, 1.1200 and 1.1300, 1.1312/14, 1.1331 respectively.

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