EURUSD Price Forecast – EURUSD Trades Range Bound As Bear’s Rule Both Currency

Colin First
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EURUSD pair saw consolidative price action during yesterday’s trading session. Forex market across the globe saw relatively subdued price action yesterday owing to risk off investor sentiment. Amid a lack of solid trigger to help create a breakout both bulls and bears waged war for control of price momentum across the day which resulted in pair trading range bound near weekly lows. Post sharp decline made earlier this week on dovish comments from European Central Bank President Mario Draghi on the slowdown in Euro-area economic growth, the pair has been trapped in a short price band range from 1.1377 to 1.1415 where it has traded in range bound fashion influenced by news driven momentum. While EURO has already been suffering from lack of proper fundamental support for bullish momentum, the latest update from Reuters survey on ECB’s Rate hike plans for 2019 which hinted at a possible delay in rate hike further added to bearish influence surrounding EURO.

Bulls Lack Fundamental Strength on Both Sides of the Pair

Investors have been of the opinion that ECB will raise interest rate during the third quarter of 2019 post its Quantitative Easing program termination in December 2018, however according to latest survey from Reuters, economists believe that overwhelming dovish macro data which hints at slowdown in European economy and slashed growth outlook for major economies such as Germany, France & Italy suggests that interest rate hike is likely to be delayed until fourth Quarter in 2019. Meanwhile, USD failed to make solid gains overnight despite slight positive momentum gained from US macro data update as Greenback still suffers from the impact of partial US government shutdown on US economy. EURO erased overnight losses and is trading flat in Asian session as news hit the market that US officials are considering removal of tariff on Chinese import goods in a bid to seal a trade deal with China and ease tensions in the global market.

Amid lack of solid fundamentals and lack of breakout trigger on both sides of the pair, EURUSD pair is expected to trade range bound across today’s trading session. As of writing this article, the pair is trading flat at 1.1391 down by 0.03% on the day. However, when looking from a technical perspective, the path with least resistance seems to be on the downside as candle chart shows that price has moved well below 20, 50 & 100 SMA, while RSI & Stochastic momentum indicators are moving from midline towards the oversold region in hourly intra-day and daily chart. Investors are now on the lookout for US macro data updates which could provide some short term profit opportunities on last trading session of the week. While technical indicate a high possibility of bearish price action, headlines hinting at positive progress in trade talks could push the pair back into bulls playground in near future. Expected support and resistance for the day are at 1.1383, 1.1377, 1.1369 and 1.1400, 1.1415, 1.1440 respectively.

This article was originally posted on FX Empire

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