EURUSD Price Consolidating, More Gains Possible
EURUSD price, news and analysis:
- Concerns about global economic growth, Apple and US/China trade tensions are currently failing to support USD as risk-averse traders look instead to currencies such as JPY and CHF for a safe haven.
- According to the OECD, global growth is slowing amid rising trade and financial risks.
- Against this background, the USD price will likely fall back further near-term, boosting EURUSD, with 1.16 a possible target for the pair.
- That's despite a report that the European Commission has, as expected, rejected the Italian government's budget plan for 2019.
EURUSD price outlook positive
EURUSD has been looking steadier over the past few sessions after its falls earlier in the year and a further move higher is now possible, especially if a compromise between Rome and Brussels over the Italian budget can be reached and the US tech sector stabilizes after its recent sharp losses caused by concerns over iPhone sales.
Meanwhile, concerns about a slowing global economy are failing to support the US Dollar.
OECD revises down global growth forecasts
Global economic growth remains strong but has passed its recent peak and faces escalating risks including rising trade tensions and tightening financial conditions, according to the OECD's latest Economic Outlook, published Wednesday.
The Organization for Economic Co-operation and Development revised down its growth forecasts for next year for most of the world's major economies and said global GDP is now expected to expand by only 3.5% in 2019, compared with the 3.7% forecast in last May's Outlook, and by 3.5% in 2020.
European Commission 'rejects Italian budget'
Meanwhile, the European Commission has rejected the Italian budget plan for 2019, according to Italy's ANSA newsagency. However, that was widely expected so has had little negative impact on the Euro.
ANSA reported the Commission as saying: "Our analysis suggests that the debt rule must be considered to have not been respected... We conclude that the opening of a procedure for excessive deficit based on the debt is therefore justified."
Italy's Prime Minister Giuseppe Conte responded by saying he remained convinced about the validity of the budget package and would meet European Commission President Jean-Claude Juncker in Brussels Saturday to discuss the situation.
EURUSD Price Chart, Daily Timeframe (March 28 – November 21, 2018)
From a technical perspective, the EURUSD price will need to break through the 50-day moving average at 1.1463, the November high at 1.1500, the 100-day moving average at 1.1528 and trendline resistance around 1.16 if it is to break above the falling channel in place since mid-April.
That could be difficult but a move up to the 1.16 level is perfectly possible and, if it breaks above it, the next target would be the October highs at 1.1622/25. Meanwhile, the pair has near-term support from the20-day moving average just below the current price, at 1.13 and at November’s 1.1216 low.
Retail trader sentiment data are positive too, currently sending a bullish signal for the pair.
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--- Written by Martin Essex, Analyst and Editor
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.