EUR/USD Fundamental Analysis – week of April 17, 2017

For the second week running, we saw the EURUSD in a consolidation and ranging mode as the pair could not make much headway on either side. We did see a few geopolitical events and some fundamental news dominating the economic headlines but even then, the pair stuck to its range as the buyers and sellers battled it out for control of the pair but none of them managed to gain the upper hand.

Euro Likely to Consolidate

The news that grabbed the headlines for last week were the comments from Trump who said that he preferred to see low interest rates in the US for as long as possible. This was a clear indication that he is likely to load the Fed with members who are very dovish and this was a jolt to the market who were expecting more and more interest rate hikes in the US in the coming months. Trump also said that he believes that the dollar is too strong especially when considered against the other currencies which were kept deliberately weak by their respective governments. This set the dollar on the backfoot and pushed the EURUSD pair from below 1.0600 towards 1.0700.

But the pair was sold into as it approached 1.0700 and we also saw the markets generally ok with the comments and the markets began to moderate down pretty quickly. We also saw some strong economic data from the US which showed the US economy in good light and this helped to keep the bid under the dollar and as a result, we saw the EURUSD pair move back towards 1.0600 in due course of time and with even more profit taking as the market approached the long weekend, the pair has basically retraced its entire bounce and sits just above 1.0600 as of this writing.

Looking ahead to the coming week, we do not have much news from the Eurozone and as far as the US is concerned, it is the usual news like the Manufacturing Index data and the unemployment claims. We do not expect these news events to rock the markets and so the markets are looking for some fundamental events to point the right direction in this pair. We expect the EURUSD pair to continue to consolidate and range in the coming week as well as we enter the second half of the month.