EUR/USD Daily Fundamental Forecast – August 18, 2017

It was a volatile day in the markets yesterday but the sum total of all the action that happened over the last 24 hours is the fact that the EURUSD pair basically sits within the range that it has been all week and has not moved this way or that despite the pulls and the pressures from different sides which tried to push it in different directions.

EURUSD In Highly Choppy Trading

Yesterday, we saw the dollar recover its strength all across the board in the first half of the day as the entire bounce in the pair, which had come out of a dovish FOMC meeting minutes and reports of disbanding of the trade and policy council by Trump, was reversed with a couple of hours and the pair was back at the lows of its range. In fact, the pair did threaten a breakdown very briefly as it made a very quick trip through 1.1680 but this was met with a lot of buying which helped it to bounce back above 1.1680 within a matter of minutes.

Once the US session began, the dollar began to give back its gains as there were rumors that one of the important staff of Trump had resigned. Though the news turned out to be false, it was enough to push back the dollar and then came the news of the terrorist attack in Spain which once again increased the global risk quotient and this caused a crash in the US stock markets. The dollar became wobbly and the euro held steady and the choppy trading continues as of this morning.

We do not have any major news from the Eurozone or the US for today, but the European stock markets did not get much time to react to the Spanish news and hence expect some reaction when the London session opens today. We expect the dollar to get weaker and this should help the EURUSD pair to move up in the short term.