EUR/USD Daily Fundamental Forecast – August 14, 2017

Through the course  of last week, the EURUSD pair has been showing strength despite the recovery in the dollar. We had also mentioned the same in our forecast as every correction in the pair was met by strong buying and this helped the pair to bounce back. Twice during the week, we saw the pair push through below 1.17 but both times, we saw the pair bounce back above 1.17 and make a strong push to the upside.

EURUSD Moves Higher on Weak US CPI

This indicated that the pair was still under the control of the bulls and we had mentioned the same as well. We had also said that unless there was a break below the 1.17 region and the pair managed to stay below this region, the risk continued to be on the upside. On Friday, the market was looking towards the CPI data from the US. It was the key data for the entire week as the NFP data had come in strong in the previous week and the market wanted to know whether the incoming data would continue to be strong, showing the recovery in the US economy, and also making the decision of the Fed for the next rate hike easier.

But the CPI data came in weaker at 0.1% when the expected value was 0.2% and this caused another bout of dollar weakness. This helped the EURUSD pair to climb through the 1.18 region once again and it managed to stay above it to close the week and thus closed the week in a strong position and primed for another bullish assault in the coming week.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US, which is generally expected at the beginning of the week but we believe that the EURUSD pair will continue from where it left off on Friday and continue to trade in a very bullish manner for today.