EUR/USD Forecast: Sideways trend is destiny for the Euro
|- Amid lack of macro drivers, the message from the ECB President Draghi about recent economic developments being weaker weighs on Euro.
- The sideways trend on EUR/USD is prevailing as currency pair remains below the short-term triangle structure.
- The Eurozone inflation is expected to follow Germany with December prices below 2% target as oil prices drop weighed.
The EUR/USD is trading little changed on the downside at around 1.1380 on Thursday as the currency pair approaches 1.1366 level representing 78.6% Fibonacci retracement of the upmove from 1.1300 to 1.1570.
With lack of strong macro data, the EUR/USD market is driven by technicals favoring the greenback after the ECB President Mario Draghi acknowledged the worse-than-expected performance of the Eurozone economy in his European Parliament testimony on Tuesday.
The EUR/USD remains in the consolidation phase after flash move below 1.1500 last Friday with little reason for the currency pair to move amid lack of the macro drivers. It would take a surprisingly strong reading on the upside in the Eurozone inflation for the EUR/USD to move upwards as 1.1400 level is within the reach.
While the macro data scheduled for Thursday are expected to confirm the Eurozone inflation rising 1.6% over the year in December, the US is expected to feature only weekly initial jobless claims data.
Technically the EUR/USD broke from the consolidation triangle on the downside while it is still moving within a sideways trend. The slide lower in the EUR/USD reflects risk-off sentiment ruling the market amid the slowdown of the global economy with safe haven currencies like the US Dollar benefitting. The broader sideways trend is prevailing with the short-term breakout from the triangle structure indicating further US Dollar strength although the technical oscillators including the Relative Strength Index and Slow Stochastics are pointing upwards on a 30-minute chart.
EUR/USD 30-minutes chart
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