EUR/USD Daily Fundamental Forecast – October 25, 2016

EURUSD continued its slow and steady movement for the day similar to what it has been doing for most of the last two weeks, except that this time, the move was up rather than down and the movement was more decisive and had a sense of purpose. Previously, all upmoves didn’t raise any sort of confidence for the traders and any upmove was quickly and forcefully pushed down by sellers making any chance of having a decent bounce impossible. But yesterdays upmove had a sense of purpose to it and the sellers did not seem to have much of an impact on the rising prices on EURUSD.

The upmove was helped by strong PMI released from the Euro region which showed the PMIs at multi-month highs and this kind of improving data from the euro region was useful for building the confidence of investors and traders and this was reflected in the slow and calculated upmove. We should have had a much bigger upmove under normal circumstances but the prices and flows continue to be dominated by global risks and central bank decisions and hence the upmove was muted which was a bit of a disappointment for the bulls. The bulls seem to get tired towards the end of the day which saw the pair trickle downwards during the US session and this morning and the pair sits at 1.0875 as of this writing.

Looking ahead to today, we have the German Ifo Business Climate coming in and we also have the ECB President Draghi speaking later today.  The Business climate reading is expected to come in at 109.6 and any reading which matches or exceeds the expectations will help to further improve the confidence of the bulls. The price is close to the support region between 1.0830 and 1.0860 and it is very important for the bulls to hold the price above this region else the buyers below this region would be few and far between and that will lead to a much bigger correction in the price which the bulls wouldn’t want.

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