EUR/USD Forecast: Not out of the woods yet, move beyond 1.1400 mark still seems elusive


The EUR/USD pair had a good two-way move on Tuesday and was primarily influenced by the US Dollar price dynamics. The greenback started the day on a strong note, albeit started losing ground during the US trading session on the back of a sharp fall in the US Treasury bond yields. The pair witnessed a sudden turnaround and built on slightly better than expected German ZEW economic sentiment-led attempted bounce from an intraday low level of 1.1276. 

The USD selling remained unabated, rather seemed unaffected by Cleveland Fed President Loretta Mester's comments, saying that the Fed may need to raise interest rates in 2019 but could still end its efforts to trim its massive balance sheet before the end of the year. The pair surged over 80-pips intraday to hit 1-1/2 week tops, though growing market concerns about the health of Euro-zone economy kept a lid on any runaway rally.

The pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading band through the Asian session on Wednesday. In absence of any major market moving economic releases, either from the Euro-zone or the US, the key focus will be on the release of the latest FOMC meeting minutes. After a dovish assessment of the latest FOMC statement, the minutes will be looked upon for fresh insight over the central bank's monetary policy outlook. The Fed's anticipated rate hike path for 2019 would influence the near-term USD price dynamics and eventually provide a fresh directional impetus to the major.

Meanwhile, looking at the recent price action, the pair has repeatedly failed to capitalize on its attempted recovery moves and the technical picture remains biased in favour of bearish traders. Hence, any subsequent up-move seems more likely to remain capped at 50-day SMA, around the 1.1385 region, which if cleared decisively might trigger a short-covering bounce towards retesting near five-month-old descending trend-line hurdle, currently near the 1.1470 region.

On the flip side, the 1.1310-1.1300 region now becomes immediate strong support to defend, which if broken could accelerate the fall further towards the 1.1260-55 horizontal support. A follow-through selling will reinforce the bearish outlook and drag the pair back towards multi-month lows, around the 1.1215 region. The downward trajectory could further get extended, even below the 1.1200 handle, towards testing its next major support near mid-1.1100s.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Analysis feed

Latest Forex Analysis

Editors’ Picks

GBP/USD consolidates losses below 1.3150 amid a tighter election poll

GBP/USD is trading below 1.3150, consolidating its losses after YouGov's MRP poll showed a tighter Conservative majority ahead of the UK elections on Thursday. Trade headlines and the Fed decision are also awaited.

GBP/USD News

EUR/USD remains pressured below 1.11 amid trade uncertainty, ahead of the Fed

EUR/USD is trading below 1.11, consolidating its gains. Uncertainty about the planned US tariffs on China looms and tension is mounting ahead of US inflation and the all-important Fed decision.

EUR/USD News

Forex Today: Boris gets a blow from big poll, tariff threat looms, focus on the Fed

President Donald Trump has yet to decide on the December 15 tariffs, according to the Wall Street Journal. On the other hand, the paper says that negotiators are laying the groundwork for a deal.

Read more

Gold stalls two-day winning streak on the Fed day, trade jitters continue

Gold prices register a mild loss of -0.05% while hovering below $ 1465 on Wednesday. The yellow metal seems to have lacked buying interest ahead of the key monetary policy meeting by the US Federal Reserve (Fed).

Gold News

USD/JPY: 200-hour EMA questions immediate rising trend-channel

USD/JPY recently took a U-turn from 200-hour Exponential Moving Average (EMA). Even so, it stays well within the two-day-old rising trend-channel formation. The pair trades around 108.75 at the press time on Wednesday.

USD/JPY News

Forex Majors

Cryptocurrencies

Signatures