EURUSD Could Remain Range Bound for Longer, Watch These Levels

Today, the EURUSD pair is little changed as traders try to figure out what will happen next with the price.

The price was heading straight up from its January 20 low of 1.0777, and reached the high of 1.1498, 18 days later on March 9, 2020. Following that sharp move higher, traders booked profits, and the price gave back 61.8% of its gains form the February low.

As the price reached a new multi-year low in February, just to create a new-multi-year long 18 days later, we can not detect a strong trend, and I think it is likely that the price will continue to trade sideways between 1.0777 and 1.1498 for longer.  Trades will probably use this range to sell-near the 2020-high and target the mid-point of the spectrum.

Read our Best Trading Ideas for 2020.

Looking beyond the Coronavirus crisis, the inflation rate in the EU will probably continue to remain low, and that should keep the ECB at bay with rising interest rates. At the same time, I think the dynamic US economy should be able to accelerate faster than the EU when the coronavirus crisis resides. The fundamentals are, therefore, suggesting to me that the EURUSD could drift lower in the months ahead.

The most significant risk to this outlook is if the Federal reserve pushes forward with more aggressive measures to boost its economy amid the coronavirus lead slowdown.

The longer-term trend in the pair remains bearish, and as long as the price trades below the 2020-high at 1.1498, I think the price could trade lower in the next few weeks and months. Bearish traders will probably wait for the price to reach the 1.1273 to 1.1498 interval before short-selling the pair.

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