EUR/USD Price Forecast – Range Bound Action to Continue Ahead of US GDP Update
The lack of clear directional bias has left EURUSD pair trading in range bound fashion across the week. EURUSD pair yesterday saw yet another dead cat bounce price move as the pair breached 1.14 handle for the second consecutive trading session but failed to establish a stable price rally above 1.1400 mark. This clearly suggests that there is a lack of fundamental support and strength in EURO’s side to establish a price rally in its favor. Meanwhile, the latest developments in the USA and major geopolitical events are hindering USD bulls resulting in neither side managing to gain upper hand. However, the latest developments in Sino-U.S. trade talks gave US Greenback an edge over EURO in immediate future.
Fed Speech Unlikely To Influence Price Action
US market hours yesterday saw US trade representative Lighthizer state that much work still needs to be done in regards to a trade deal between two nations hinting that the current scenario may not be as optimistic as US President Trump tweeted earlier this week. Further, dovish comments from ECB members during their speech yesterday resulted in EURO suffering additional pressure adding strength to USD’s rebound during American market hours. Meanwhile, the hopes for Brexit delay limited the decline in Asian market hours resulting in the pair trading range bound near the mid-1.13 handle. As of writing this article, EURUSD pair is trading flat at 1.1381 up by 0.11% on the day.
Moving forward, investors await cues from macro data updates for meaningful short term trading opportunities. On the release front, the Euro area calendar will see the release of France & Germany’s CPI & HICP data while the US macro calendar will see the release of GDP data and speech by Fed members Bostic, Harker & Kaplan. For the pair to see a breakout in favor of USD today, the GDP readings should beat both forecast and previous readings, however, the current scenario suggests that GDP update will beat forecast but remain lower than previous reading in which case range bound action is likely to continue. Speech by Fed members are unlikely to cause any major change in price action as they are expected to re-iterate the dovish Fed stance similar to Powell’s speech from earlier this week. Expected support and resistance for the pair are at 1.1340, 1.1300 and 1.1410, 1.1450 handles respectively.
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