EUR/USD Price Forecast – Range Bound Action To Continue Ahead of US GDP Update

The EURUSD pair yesterday closed positive for a second consecutive trading session this week. While the majority of Asian and European market hours saw relatively subdued price action, positive cues from European and Asian market hours led to the pair breaching 1.14 handle yet again but the rally above said handle was short lived as EURO lacked fundamental strength to push further or sustain a stable rally above 1.1400 mark. US market hours saw mixed macro data outcome and Fed Chair Jerome Powell reaffirm dovish stance of the Fed during his speech before U.S. Senate banking Committee stating that recent events have resulted in conflicting signal and so FOMC members have decided to take a patient approach.

Powell’s Speech Provided Dovish Cues To US Dollar

Powell’s comments along with dovish investor expectations for US GDP data scheduled to release later this week caused US government bond yields to decline slightly. This resulted in US Dollar seeing a sharp fall in value in the broad market resulting in EURUSD pair managing to breach 1.14 handle during US market hours. However, a clear lack of fundamental support for EURO bulls and profit booking activity post overnight gains resulted in pair moving back below 1.14 handle while the Greenback’s weakness helped pair remain stable above mid-1.13 handle resulting in consolidative price action. As of writing this article, EURUSD pair is trading flat at 1.1382 down by 0.03% on the day.

Investors are now awaiting cues from the speech by ECB and Fed members for short term profit opportunities but the pair is unlikely to see any major change in price momentum or directional bias until US GDP data is released later tomorrow. On the release front, EU Calendar will see a speech by ECB’s Jens Weidmann and Euro Area Economic Sentiment Index while the US calendar will see the release of December Trade Balance,  January Durable Goods Orders, and Pending Home Sales along with a speech by Fed Chair Jerome Powell in front of Housing Finance Services Committee. Investors are also on the lookout for headlines on meeting between US President Donald Trump & North Korean Premier Kim Jong Un which is also expected to inspire some volatility. A look at the intra-day chart from a technical perspective suggests that the pair lacks directional bias in immediate future. Expected support and resistance for the pair are at 1.1355/57, 1.1300, 1.1250/48 and 1.1410, 1.1450/52, 1.1500 respectively.

Please let us know what you think in the comments below