EUR/USD Price Forecast – Range Bound Action in Favor of USD To Continue Across The Day

EURUSD pair still trades in a rangebound as the pair failed to achieve a breakout despite highly active economic calendar schedule. Both Europe and US data updates saw mixed outcome in major macro data updates of the day. Further ECB meeting minutes report for the month of January also re-affirmed the central bank’s dovish stance on future proceedings. However, during the speech post-release of ECB meeting minutes report, Peter Praet in his speech mentioned that while the recent macro data outcome matches expectations, the ongoing rally in influenced by uncertain market conditions and so the central bank will take more time to observe market carefully to gain clarity before taking major actions. The report saw that policy committee members acknowledge that near term growth is likely to be weak but more is needed to assess the impact of economic slowdown on a medium-term time frame.

Dovish ECB Stance Gave USD An Edge Over EURO

Further, the key focus – discussions related to TLTRO plans of ECB suggested that ECB is likely to make preparations for TLTRO proceedings very swiftly, however given uncertain market conditions such as Brexit progress, Sino-U.S. trade talks and threat of tariff being imposed on European auto market by U.S.A, the central bank is unlikely to begin TLTRO operation in the near future. As both Sino-U.S. trade talks and Brexit are likely to see a clear direction on future progress owing to both events seeing deadline in March. This suggests that ECB is unlikely to execute TLTRO until the end of March. To Dovish stance of ECB gave US Greenback an edge over the common currency, but disappointing macro data results from U.S.A resulted in the pair failing to see a breakout in favor of USD. As of writing this article, EURUSD pair is trading at 1.1338 up by 0.04% on the day.

In Asian market hours today, the pair saw rangebound price action below mid-1.13 handle as USD got an edge over EURO. Moving forward, the pair is likely to continue range bound action across the day as the trading session comes to close for the week while there are no high impact headlines to provide a directional bias. Investors await macro data updates from US & European macro calendar for meaningful short term profit opportunities during today’s trading session. The European market will see the release of German GDP, IFO business climate index, Business expectations and current assessment data and Euro area CPI update while US market lacks macro data updates. However, US market hours will see speech from ECB president Mario Draghi and FOMC member Clarida whose comments are expected to inspire short term volatility.