EUR/USD Daily Fundamental Forecast – December 29, 2017

The EURUSD pair continued to move higher during the course of trading over the last 24 hours. The general weakness in the dollar continued across the board and as we have been saying over the last week or so, there are no specific fundamentals associated with this weakness in the dollar. The moves seem to do more with the flows than anything else and this is the reason why we are seeing the euro moving higher.

EURUSD Continues Higher

The euro broke through the 1.1950 region for a brief while and though such kind of one sided moves could be very tempting for the traders, we would continue to advise our traders to stay away from the markets and not get dragged into such moves. With no fundamentals or economic events supporting such a move, there is a high possibility that these moves could reverse once the market is back to full liquidity and it is important that the traders do not get caught out when the market reverses.

Of course, the market may not reverse when the full liquidity returns but it is important to consider the fact that these moves are happening on low liquidity and hence there is much more risk associated with such moves than during normal market liquidity. We would not be surprised to see the momentum carry forward and push the euro beyond the 1.20 mark on the last day of trading for this year and also with the long weekend ahead as well.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US and so we can expect the bullish consolidation to continue and bulls looking to take advantage of even lesser liquidity that is likely today as this is the last day of the year.