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EUR/USD Price Forecast – EURO Rebounds From Overnight Decline

Colin First

The EURUSD Pair yesterday saw slow downside price action across the day. Following sharp upward spike on dovish FOMC update, the EURUSD pair saw bulls consolidate for a short while post which the pair saw steady downside price action. European markets saw two major high impact events scheduled during the latter half of the day. Bank of England’s interest rate update & forward guidance update, EU leaders summit which was to decide on Brexit deadline extension. This caused investors to take on a cautious tone and hold back from placing any major bets. As the pair failed to sustain positive price rally on cautious investor stance, the price fell back to pre-FOMC levels.

EURO Gains on Brexit Deadline Extension

However, the pair rebound from yesterday’s decline and saw positive price action in Pacific-Asian market hours. Post rebound, the pair took on consolidative price action near intra-day highs where it has remained rangebound ahead of European market hours. This upside move was initiated at both BOE MPC update & EU leaders summit saw a positive outcome. There was also a petition in UK parliament website for revoking article 50 received support from 2 million people albeit rejected by PM May. However, an extension of Brexit deadline and prospects that hint at an increased possibility of second Brexit referendum has improved investor sentiment.

These factors now provide positive support to EURO bulls today. As of writing this article, EURUSD pair is trading flat at 1.1378 up by 0.04% on the day. Investors are now looking at economic calendar updates for short term profit opportunities. On the release front, both European & U.S. calendars are highly active today. The EU calendar will see the release of Germany & France’s Manufacturing & Services PMI updates and EU area’s Manufacturing, Services & Markit Composite PMI updates. Meanwhile, the US calendar will see the release of Manufacturing & Services PMI data and existing home sales data and a speech by FOMC member Bostic. Expected support and resistance for the pair are at 1.1360, 1.1341, 1.1325 and 1.1380, 1.1420, 1.1460 respectively.

Please feel free to let us know what you think in the comments below. 

This article was originally posted on FX Empire

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