EUR/USD Daily Fundamental Forecast – August 1, 2017

The EURUSD pair continued to make some steady progress as the month end currency flows dominated the moves yesterday and the pound and the euro managed to benefit from it. As we have been mentioning over the last few forecasts, we still believe that there is a lot of resistance and selling lying in this region and unless the pair crosses the 1.19 region comfortably in the short term, we believe that we may be in for a deeper correction.

EURUSD Moves Higher

The uptrend in the pair picked up yesterday, after having slowed down over the past few days. The pair pushed through 1.18 and moved higher. There was not much fundamental news around to drive this move and so it had to be put down to the fact that it was month end and the month end flows helped to dominate the news. The fact that the moves began to take place around the London fix also pretty much confirmed that these moves were something to do with month end flows and settlements.

The market awaits in anticipation to all the news from the US later in the week. With the euro strength pretty much settled for now and the talk of tapering being postponed to beyond summer, the dollar is firmly back in focus for now and the employment data later in the week should provide us with some short term direction. The dollar bulls would hope for some respite from the data and this would finally help them to break the shackles and bring in some decent correction in the pair.

The data releases for the new month begin today with the Manufacturing PMI data scheduled to be released from the US later in the day. It will be watched closely for any signs of reversal in the trend of weak data from the US though it is unlikely to bring in any major volatility. The Eurozone does not have any data releases for today but we should watch out for good volatility today as the market positions itself for the new month.