EUR/USD Price Forecast – Range Bound Action To Continue Ahead of Sino-U.S. Trade Talks Conclusion

EURUSD pair is finally consolidating after two consecutive trading sessions of highly volatile price action. Driven by new and macro data updates, both sides of the pair saw back to back sharp price swings in the broad market. However, given the fact that EURO bulls lack fundamental support to sustain a positive price rally above 1.13 handle owing to disappointing Euro area macro data and a weakened US Dollar in broad market owing to worse than expected US macro data updates which took the wind out of USD’s sails, the pair is now trading range bound above mid-1.12 handle. Given the fact that investor sentiment in the broad market still remains divided over proceedings of Sino-U.S. trade talks which concludes today, traders have held back from placing any major bets.

Tightening German-US Yield Spreads Favors EURO Bulls

This scenario has resulted in bulls and bears balancing out their influence on the pair helping underpin range-bound price activity across Asian market hours. As of writing this article, EURUSD pair is trading flat at 1.1288 down by 0.10% on the day. Further, the spread difference between US & German government bonds are narrowing for both 2-year and 10-year bond yields and this is favoring EURO bulls to some extent providing the common currency fundamental support required to stay above mid-1.12 handle. Investors are now looking forward to macro data updates and headlines for meaningful trading opportunities.

On the release front, European macro calendar sees the release of trade balance data while US macro calendar will see the release of Empire State Manufacturing Index data, industrial production data and Prelim UoM Consumer Sentiment update which are expected to provide plenty of short term trading opportunities as the trading session comes to close for the week. In immediate future, the pair needs to breach 1.13 handle and establish a steady rally for EURO to gain upper hand with resistance at 1.1300, 1.1310 handles while a breach below 1.1200 handle is required for USD to regain control of price action with support at 1.1275, 1.1250 handles respectively.

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