The EURUSD pair yesterday opened on a positive note and moved well above 1.13 handle amid holiday thin trading activity. Post recovering from 4- month lows hit on Friday, the pair carried forward with its positive price action and traded well above 1.13 handle during Asian and European market hours. However, the price action was flat during American market hours as the US market was closed yesterday on account of celebrating Former US President Washington’s birthday which has been declared as a national holiday. Once trading activity resumed during Asian market hours today, profit booking activity dragged the pair below 1.1300 but weakness surrounding US dollar in the broad market helped the pair stay well above mid 1.12 handle during Asian market hours.
EURO Bulls Lack Strength To Make Bullish Breakout
The dollar continues to suffer bearish influence in the broad market owing to the dovish comment from Fed officials on Friday and political climate in the U.S.A. These factors are expected to weigh down US Greenback in the broad market across today’s trading session and then some in near future. Meanwhile, EURO is also suffering from dovish influence owing to ECB’s attempts for refinancing operation which is considered as a dovish factor in the market. As of writing, this article EURUSD pair is trading at 1.1295 down by 0.12% on the day. Moving forward, investors await macro data updates from Europe and US for short term profit opportunities and while bullish breakout is unlikely as Dollar’s weakness could influence positive price action but EURO lacks the strength to build further momentum.
On the release front, European calendar will see the release of German ZEW current conditions, German ZEW economic sentiment and Euro Area ZEW economic sentiment along with a speech from ECB’s Praet while US calendar is silent aside from a speech by FOMC member Mester. Sino-U.S. trade talks are set to begin today in Washington and headlines on same will also be on focus as investors will take directional cues from the update. For the day ahead, the pair will trade range bound with bullish bias in favor of Euro. To the upside, the pair faces strong resistance at 1.1330/35 handle which needs to be cleared for Euro to establish bullish price rally while a decline below support at 1.1290 followed by 1.1257 is required for US dollar to re-establish its dominance.
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This article was originally posted on FX Empire
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