EUR/USD Price Forecast – EUR/USD Faces Pullback over Strong Resistance around 1.179 Handle

The Euro rallied open the week on Monday, reaching towards 1.18 level but strong resistance around 1.179 handle caused the pair to experience some pullback in early Asian market hours. However the pair still has strong support around 1.173 handle which has helped EURUSD remain in a range bound movement around 1.175/174 price handle. The US dollar will continue to move due to risk appetite and of course the trade war talk. However the main driver of market in near future is going to be a sign of European solidarity, as Merkel has solidified her position, and of course the Italians seem to be willing to work with the EU much more than originally thought. As trading session moves forward the pair is expected to face strong resistance around 1.180 handle but short term trading will see lot of noise which result in the pair seeing fluctuating price action across the week.

EURUSD Faces Resistance

The EUR/USD pair is on the rise, but the USD is seeing some buying in Tuesday’s early market window. German ZEW surveys due for Tuesday, but otherwise a quiet day on the docket. Bulls are expected to wait for a finished pullback before adding into long positions. German trade balance which release yesterday was much better than expected which also helped EURO stabilize around 1.175/74 handle despite increase in USD bids. Mario Draghi has delivered a bullish assessment of the Eurozone’s economic prospects, saying monetary stimulus undertaken by policymakers had been and would continue to be “very effective” in boosting growth and inflation.

The European Central Bank chief told lawmakers at the European Parliament on Monday that the measures — which include negative interest rates and a €2.4tn bond-buying programme — would boost growth and inflation by 1.9 percentage points each between 2016 and 2020.

While the ECB will stop buying new bonds, it is expected to reinvest the proceeds of securities that it has already bought under QE, a programme that began in March 2015. It has held its deposit rate — now -0.4 per cent — below zero since the middle of June 2014 and rates are expected to remain on hold until September 2019. The shift towards the exit came in spite of signs that the threat of a trade war was causing a slowdown in the Eurozone. Macro calendar on US markets will see release of JOLTS Jobs opening for May. Expected support and resistance for the pair are at 1.1710 / 1.1685 / 1.1650 and 1.1795 / 1.1820 / 1.1850 respectively.