EUR/USD Price Forecast – USD Rally Took A Breather Leading To Consolidative Price ActionEUR/USD recovered from 2-week lows post which it is trading in range bound price action.
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.
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