EUR/USD technical outlook

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EURO and USD trending points

  • Amidst concerns of global economic growth, US/China trade war, tech stock wobbling, USD has still been holding its key support, currently residing just over 96.00, however, buyers are stepping away.
  • OECD mentioned yesterday that the global growth is tumbling and financial risks are firing up.
  • Against the background, the USD might fall back in near-term outlook, as next Thursday and Friday would be holiday in US and in that timeframe, it would more likely to fall below 95.50 region, however, key support for USD reigns at 94.30 region.
  • While USD might be falling apart amongst US holidays, boosting EUR/USD momentum, the key resistance lies at 1.1600 for EUR/USD pair.
  • Although Italian budget is regaining hits, as EU rejected Italian government’s budget, EURO has been holding on a tight range above 1.1410, and EUR/USD outlook remains positive.

EUR/USD outlook remaining positive

EUR/USD has been looking steadier over the last couple of days, as it had been swinging on a tight range around 1.1400. While this report is being written, Euro is residing at 1.1410 and further upsurge is anticipated.

There had been a number of issues negating the EUR/USD positive momentum including the Italian budget issue, sluggish global growth, global scale sell-off, political turmoil over European territory, yet in the near-term outlook, EUR outlook seems to be brightening, as Thursday and Friday would be holiday in USA. In this timeframe, EURO is expected to reach above 1.1500 and key resistance lies at 1.1600 region. On the flipside, the key support for EUR/USD resides at 1.1290.

EUR/USD daily price chart

EUR/USD daily price chart

Crucially, OECD revised down the global growth forecast and according to its latest Economic outlook, published Wednesday, global economic growth remains strong, yet it has been facing escalating risk including tightening financial conditions and rising trade tensions. Additionally, European commission rejected Italian Budget again, firing up the dialectic daedal regarding Italian budget issue, enhancing risk of a Euro stumbling in a long-term outlook.

USD had been looking good yesterday, as an important FED official, John Williams told that the FED would be hauling its hawkish interest rate, previously a recent comment from a newly appointed FED vice chairman, Richard Clarida, put the interest rate issues in jeopardy last week. While the USD outlook seems to electrifying another leg of USD rally in a long-term outlook, the EUR is likely to suffer in the upcoming week and GBP momentum hangs around the Brexit balance.

Bottom Line

So far, EUR/USD outlook in near-term outlook seems to be brighter, as the market data suggests, however, in long-term outlook, EUR future does not seem to be brightening, as Italy is in direct collision with EU regarding its budget, global growth has been sluggish and global scale stock sell-off has been taking control amidst trade war worries and a complicated complexion of European politics.

Crucially, APEC failed to reach an agreement in its recent summit igniting the trade-war worries further. In the next couple days, EURO seems to be gaining momentum and GBP volatility is expected, as UK PM Theresa May leaves for Brussels to sign an important deal regarding the EU-UK future relationship.

Read on GBP/EUR technical outlook here

[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]

 

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