EUR/USD Daily Fundamental Forecast – February 26, 2018

The EURUSD pair trades in a choppy manner as there has not been any major fundamental or economic news or development over the last few days and this is being reflected in the price. The pair continues to trade on either side of 1.23 and it looks as though this is something that is likely to last for the short term.

EURUSD Choppy

We are heading towards the end of the month and that is why we are seeing the monthly flows beginning to affect the price action in the pair. The pair is likelyto continue to be under the influence of the trade positioning and option expiries for the rest of the month as the traders begin to look ahead to the new month and new challenges that lie ahead. The dollar traders would be especially worried about the forthcoming month as they await action from the Fed beginning this week as the new Fed Chief is set to testify during the course of the week.

It would be interesting to see what Powell says as this would give an idea about what he thinks about the monetary policy of the Fed and whether he would be bringing in any major changes. It is unlikely for this to happen and he is expected to be neutral and the Fed is also expected to stick to its stand that it would be taking a call on the rate hikes for the year based on the incoming data. The first of the rate hikes for this year is expected to arrive in March and this should keep the dollar buoyant.

Looking ahead to the rest of the day, we have the ECB President Draghi making a speech and he is expected to continue to strike a neutral tone as he may not want to push the euro too much higher. The strong economic data from the Eurozone is there for everyone to see and so we doubt whether he would stir the markets today.