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EUR/USD Daily Price Forecast – Recovery may Halt Ahead of Growing Greenback & EU Elections

Nikhil Khandelwal

The Euro pair had shown an improved performance last day indicating the beginning of a potential recovery in the pair. Anyhow, the EUR/USD was 0.19% down today amid Greenback upsurge. The USD Index seemed to gather some fresh bids in the early hours ahead of positive US data.

The US-China Trade talks have lowered the overall sentiment of the Dollar Investors. Recently, the US blacklisted Huawei, Chinese Giant Telecommunication Equipment Company. This US action acted as a catalyst to undermine the Chinese business. Following the news, many Huawei clients took a back foot. Some European chipset manufacturers who earlier provided chips to the Company now has halted the supply. Moreover, Google has suspended Andriod updates for Huawei.

China must have indeed developed enrage over its US counterpart. Investors stay worried about China’s retaliation against this act. This pessimism around the trade talks continues to maintain pressure over the Greenback. The USD Index was down yesterday amid trade dispute tensions. The EUR/USD benefits from the Greenback weaknesses. However, today the Index was trading at 98.02 levels, 0.1% since opening.

The EU elections will take place from May 23 to May 26. Theresa May wanted to get her deal pass the Parliament before the EU elections. Somehow, the PM failed to do so and would sit for the EU elections. According to a Survation poll, Nigel Farage’s Brexit Party may lead over the Tories and the Labor. The survey consisted of 781 Conservative Councillors. The results depicted that 40% were planning to support the Brexit Party at the EU elections. It seems a tough time for the Euro pair ahead.

EUR/USD Significant Events

There are no significant Euro-specific events for the day. At around 14:00 GMT, the European Commission would release the May Consumer Confidence Index. The market expects the figures to stay slightly bullish this time.

On the USD-specific events, the Greenback has already risen in the early session ahead of positive expected Housing data. The consensus estimate the US April MoM Existing Home Sales to report 110K above the previous 5.21M. However, this upliftment in the USD Index provided a downward pressure over the Fiber.

Technical Analysis

EURUSD 60 Min 21 May 2019

The Fiber made a descending trajectory heading towards the lower boundary of the Bollinger Bands. The Relative Strength Index (RSI) mimicked the pair’s movement and pointed between 35-40 levels. This current reading of RSI indicates poor momentum and weak investor interest. Also, the Bollinger Bands possessed shorter band gap, revealing low volatility in the pair. On the upper side, healthy resistance levels await near 1.1175, 1.1185, and 1.1225 levels. On the flipside, the pair might find major support points near 1.1136 and 1.1111 levels.

This article was originally posted on FX Empire

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