EUR/USD Price Forecast: EUR/USD Grinds in Tight Range as Breakout Beckons


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It has been a slow start to the week with the US Bank holiday resulting in a low liquidity Monday which has largely continued into Tuesday’s European session. EUR/USD has continued to trade in a 50-pip range between the 1.0900 and 1.0950 zones as we approach the US open.

We have heard a host of comments from European Central Bank (ECB) policymakers to kickstart the week with most tilted to hawkish side around a July rate hike. This has however failed to inspire any further euro appreciation against the greenback thus far as Fridays highs remain a step to far at this stage. As mentioned ahead of the ECB meeting last week the rhetoric from policymakers has been striking a similar chord for the past couple of months and thus could explain the limited market reaction.

We did have some lightweight data out of Europe this morning as well with German PPI data coming in lower than expected in a boost for the ECB. The construction sector rebounded in April but building activity slowed once more which might see recessionary fears tick higher. According to EuroStat data, construction output shrank 0.4 percent on a MoM basis following a 1.7 percent decline in March.

In the Asian session the People’s Bank of China (PBoC) slashed two key lending rates for the first time since August 2022, in a bid to stimulate growth. Rumors have circulated for a while that the economic recovery and demand boost expected out of China has failed to materialize. The PBoC cut the rates on the one-year loan prime rate (LPR), which is the medium-term lending facility used for corporate and household loans as well as the 5-year rate (a reference for mortgages) by 10bps. However, it appears market participants were looking for more as the boost in sentiment waned pretty quickly following the European open.

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Later today we have Housing Starts and US Building Permits data due which shouldn’t have any major impact on price action. The week ahead in general doesn’t have a lot of direct Euro or US risk events with the Bank of England (BoE) rate decision the main event this week and could stoke volatility.

The biggest risk to EURUSD this week could come in the form of testimony from Federal Reserve Chair Jerome Powell or comments from fellow Fed policymakers. Following last weeks pause there does remain some uncertainty from market participants as well as caution as the way forward for the rest of 2023. Whether the comments and testimony from Fed policymakers clears this up remains to be seen.


For all market-moving economic releases and events, see the DailyFX Calendar


Looking at EURUSD from a technical perspective and I am still leaning toward further upside over the medium and longer term. As discussed in my analyst pick last week however, a short-term correction following last weeks extended rally to the upside is growing ever more appealing.

EUR/USD Daily Chart – June 20, 2023

A screenshot of a graph  Description automatically generated with low confidence

Source: TradingView

Dropping down a H2 chart and looking at it from an intraday perspective we can see the range in play since Friday’s rally. A H2 candle close either side of the range could be the precursor for a larger move. As mentioned from a shorter-term outlook I am looking more toward a downside breakout with immediate support at the 1.0880 area before the previous H2 swing around 1.0860 which lines up with the 100-day MA comes into focus.

Alternatively, a break to the upside from here will have the 1.1000 psychological level to contend with before attention likely turns to the YTD high.

Key Levels to Keep an Eye On

Support Levels

Resistance Levels

EUR/USD H2 Chart – June 20, 2023


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Written by: Zain Vawda, Market Writer for

Contact and follow Zain on Twitter: @zvawda

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