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EUR/USD Price Forecast – Pair Trades Dovish For Thrid Consecutive Session on Strong USD

By:
Colin First
Updated: Mar 5, 2019, 06:53 UTC

Shared Currency continues to slide despite healthy risk appetite in broad market.

EUR/USD  Price Forecast – Pair Trades Dovish For Thrid Consecutive Session on Strong USD

The EURUSD pair is trading with a dovish bias for the third consecutive trading session as US Greenback remains strong in the broad market. Despite, President Trump’s tirade causing USD to weaken temporarily, given the recent positive run of US government bond yields and favorable proceedings in US Wall Street over Sino-U.S. trade talk progress, analysts and investors have begun to believe that positive outcome in trade talks could lead to further rate hikes by the US Fed in 2019 as positive outcome would boost both the US & Chinese economy. The US Dollar continues to grow stronger in the broad market supported by the upbeat performance of US Treasury Yields.

Flash PMI’s Eyed For Short Term Profits But Unlikely To Provide Directional Bias

This combined with the dovish influence stemming from Asian markets over worse than expected Caixin services PMI update from China has resulted in the dovish price action of the pair despite risk appetite remaining high in global markets. As of writing this article, the EUR/USD pair is trading at 1.1330 down by 0.07% on the day. Moving forward, investors are on the lookout for flash PMI updates from both sides of the currency pair for short term profit opportunities. Meanwhile, headlines related to Sino-U.S. trade talks will continue to dictate directional bias amid a lack of further updates on Brexit and E.U.-U.S. trade talks.

On the release front today, European economic calendar will see the release of French and Germany’s Services PMI, Italy’s Preliminary Q4 GDP data, Euro area retail sales update, Markit Composite PMI & Services PMI while US economic calendar is scheduled to see the release of Markit Composite PMI & Services PMI updates, ISM Non-Manufacturing PMI data, and New home sales data. Investors now wait to see how price action will react to flash PMI’s as strong optimism surrounding Sino-U.S. trade talks overshadowed disappointing outcome first batch of US PMI’s released last Friday. When looking from a technical perspective, price action in hourly intra-day charts and daily charts show that bears have begun encroaching on price momentum. The price is below 20,50 & 100 MA’s in intra-day charts while RSI & Stochastic momentum indicators also lean towards oversold territory but yet to cross the line suggesting bearish price action is likely to continue in foreseeable future.

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About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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