EUR/USD Price Forecast – USD Rally Took A Breather Leading To Consolidative Price Action

EUR/USD recovered from 2-week lows post which it is trading in range bound price action.
Colin First

The EURUSD pair is finally seeing some breathing space following four consecutive sessions of bearish price action. The dollar started gaining strength towards the end of last week, but EURO bulls managed to limit downside action and close positive for the week. However, trading activity this week began in favor of the US dollar as holiday thin market created a gap in market volatility, trading volume and risk appetite from greater part of the Asian market. Further disappointing macro data in the Euro area and Brexit proceedings added to market woes causing investors to worry about the slowdown in Euro area economic activity resulting in additional bearish pressure for the common currency. This gave US Greenback the strength needed to make a bearish breakout.

Disappointing U.S. Macro Data Was Saving Grace For Euro

Following week-long decline and release of all major U.S. macro-economic data, U.S. dollar bulls now lack the trigger to push forward with further downside action. Disappointing jobless claims data gave Euro bulls much need push to recover from decline while USD bulls calmed down in the broad market. However, Euro has failed to capitalize on upside push as Euro bulls lack fundamental support to establish positive price rally, resulting in range-bound price action following rebound from intra-day lows near mid 1.35 handle. As of writing this article, EURUSD pair is trading unchanged at 1.1340 having hit an intra-day high at 1.1354 earlier in the day. Moving forward, the range-bound price action is expected to continue for the rest of today’s trading session given lack of macro data updates that could induce a breakout.

On the release front, while both sides of the pair lack first tier data updates, the calendar sees the release of second tier data in both E.U. & U.S. markets. E.U. calendar sees the release of German trade balance data and preliminary French Q4 NFP data, while U.S. calendar sees the release of WASDE report and U.S. Baker Hughes oil rig count data. When looking from a technical perspective, the pair lacks directional strength but remains near recent lows. The pair needs to breach support at 1.13110 handle for resuming downside action while a breach above 1.1400 is required for EURO bulls to regain control of price action.

Please let us know what you think in the comments below

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.