EUR/USD has been quite impulsive under the recent bearish momentum which led the price towards 1.1300 support area recently. The Eurozone economic slowdown disrupted EUR gains, while USD went up amid the regulator's decision to keep interest rates unchanged.
The eurozone's economic slowdown may be longer than expected. The slowdown did not affect the economy yet, but a slower growth is expected to lead to certain weakness in EUR. Due to the BREXIT process started in 2016, an inflow of a good number of investments from the UK had an impact on EUR which increased 12% since Mid-2016 to September 2018 which may help the currency to sustain certain bullish momentum against USD. Today, the Eurogroup will discuss recent issues related to France, Germany and Italy, and the results of the meeting will play a vital role for the upcoming momentum of the currency throughout the week.
On the USD side, US-China trade talks are still unsuccessful. The US is trying to pressure China on Longstanding demands. Until the deal is reached, this trade war may impact USD in several ways in the coming days. Several FED representatives are going to deliver a speech this week, whereas FED Chair Jerome Powell's testimony on Tuesday is expected to have a good impact on the USD gains as certain weakness in the inflation is expected to stop the FED from future rate hikes. Consumer prices is expected to rise 0.1% last month compared to December's fall of 0.1%, but on yearly basis, the indicator is expected to grow 1.5% despite the expectation of 1.9% jump which would be caused by the partial government shutdown process.
As of the current scenario, the upcoming events are expected to have a significant impact on the volatility of this pair whereas any dovish outcome from FED may lead to certain USD losses. The eurozone economic slowdown did play a vital role, but there are certain positive things as well, such as slightly better economic results like German Trade Balance and French Industrial Production which are expected to lead to certain EUR gains in the long run.
Now let us look at the technical view. The price is currently trading near the support area of 1.1250-1.1300 from where it may push higher with certain bullish pressure towards 1.1450-1.1500 resistance area in the coming days. As the price is still residing inside the range bound, the price is expected to rise above the support area of 1.1200, the bullish bias is expected to continue further.
SUPPORT: 1.1200-50, 1.1300
RESISTANCE: 1.1450, 1.1500
BIAS: BEARISH
MOMENTUM: VOLATILE