EUR/USD Price Forecast – Range Bound Action Continues Ahead of Powell’s SpeechThe pair moves range bound as both sides lack decisive factor for breakout while headlines underpin bulls to some extent.
The EURUSD pair opened near Friday’s lows but managed to stage a solid recovery price rally yesterday. Optimism surrounding Sino-U.S. trade talks resulted in increased risk appetite in the broad market. This helped EURO bulls stage positive price action and recover all of the loss incurred on Friday. US President Donald Trump tweeted that trade talks continue to show solid progress and deadline for U.S. tariffs on China is going to be delayed. This combined with expectations for a delay in Brexit deadline also underpin EURO bulls giving the common currency fundamental support on its ongoing positive price run. The rally saw price action of the pair hit previous week highs near which the pair saw consolidative price action early in the day.
Sino-U.S. Trade Deal Optimism Underpins EURO
The pair has since eased from previous session highs on profit booking activities but weak USD and increased risk appetite in the market has helped keep the price action remain steady above the mid-1.13 handle. For now, growing concerns of an economic slowdown in the Euro area continues to limit upside price move of EURO. As of writing this article, EURUSD pair is trading flat at 1.1353 down by 0.04% on the day. Moving forward, investors are looking at macro data updates for meaningful short term trading opportunities and headlines and speech by key central bank members from both sides of the Atlantic ocean for directional cues.
On the release front, today European calendar will see the release of GFK German consumer climate data and speech by ECB member Mersch while US calendar sees the release of building permits and housing starts data along with a speech by Fed Chair Jerome Powell in front of the Congress. The directional cues derived from Fed Chair Powell’s speech later tonight will decide the short to medium term direction of price rally. To the upside, the pair faces strong resistance near 1.1375 and 1.1400 which needs to be breached for bulls to gain dominance and stable rally above mid – 1.14 handle is required for long term rally in favor of EURO while to the downside, there is strong support near 1.1300 and mid – 1.12 handle which needs to be beached for USD to gain dominance and decline below 1.1200 handle is required for further decline in favor of US Greenback. As long as price action remains within 1.1300 to 1.1400 the price action is likely to remain range bound.
Please let us know what you think in the comments below