EURUSD pair continues to trade positive since trading session opened for the day and has a relatively positive performance last week despite lack of fundamental support on broad based dollar’s weakness. However profit booking activities erased profit made early last week and sudden strength that US dollar received late on Friday over equity market collapse resulted in the pair falling back below the key price level 1.1495/98 handle which had acted as psychological resistance over last three months. The pair has mostly maintained range bound price action despite positive bias prevalent in forex markets as disappointing Chinese trade data hurt investor sentiment resulting in subdued risk appetite in broad market.
Moving forward, the pair is expected to continue range bound price action as majority of investor focus has now turned to Brexit proceedings in UK with parliament set to vote on much hated Brexit deal proposed by PM May last month. Euro’s upside move for the month ahead is expected to be very limited and is expected to remain trapped within wider price band limits that had held control of the price action over last few months as ECB minutes released last week hinted that the central bank is focused on macro data updates for their decision on policy tightening schedule which for now suggests that summer of 2019 will pass through without any rate hikes.
This combined with mixed data from Euro area and individual European markets clearly hints at economic slowdown over ongoing political and economic issues greatly limiting fundamental support for any sharp upside move. On release front today, US calendar is relatively silent while European markets will see release of Industrial Production data which has dovish forecast. US government continues to remain in partial shutdown and Wall Street indices closed in red last Friday, this combined with dovish performance of major US index futures (DOW 30 & S&P 500 futures are down by 0.78%, NASDAQ down by 1%) in Asian market also limited USD bulls momentum in broad market. Given lack of influential headlines or high impact macro data which could trigger a breakout, the pair is set to continue range bound price action across today’s market hours with price expected to remain stable above mid-1.14 handle. Expected support and resistance for the day are at 1.1460, 1.1440, 1.1420 and 1.1485, 1.1498, 1.1510 respectively.