EUR/USD Daily Fundamental Forecast – April 26, 2017

We had mentioned in our forecasts at the beginning of the week that the momentum in the EURUSD pair is likely to carry it further on to 1.09 and even 1.10 as thats what we have been seeing over the past 24 hours as the pair has since pushed through 1.09 and trades just below 1.0950 as of this writing as the risk trades continue to in the markets, carrying on from the positive news for the euro over the weekend.

Euro Continues to Move Higher

In the weekend, we had the French elections and the results which gave a victory to Macron and put him into a run off on May 7 against Le Pen but the opinion polls suggest that he is way ahead of her in the run off. Macron is considered as business friendly and also prefers to work with business with euro as the base and so his victory is considered as a huge positive for the euro.

On the other hand, we have seen the dollar weakening across the board as the stock markets and the risk trades have taken a cue from the results and this has led to the investors pulling out funds from safe assets and the dollar and pushing them into the euro and the stock markets. We have also seen Trump continue his rhetoric against the neighbours of the US where he continues to say that he intends to build a wall on the border and renegotiate trade with Canada. These kind of statements are not taken very kindly by the market and they have shown their displeasure by selling the dollar.

The euro has easily cleared the highs of the year around the 1.0900 region and the EURUSD pair is set to continue to move towards 1.10. Looking ahead to the rest of the day, we do not have any major news from the eurozone or the US for the rest of the day and so we can expect the pair to continue higher during the day as the risk trades abound. We are also heading into the Euro rate announcement and the statement tomorrow and we expect the EURUSD pair to be buoyed leading into it.