EUR/USD Daily Fundamental Forecast – August 8, 2017

You know it is summer when the range of the EURUSD pair becomes less than 50 pips for the day. Mondays are usually days of low liquidity and low volatility as well as traders return back slowly from their weekends and just spend most of the day observing the markets and waiting for the right price to establish their positions. It is also a day when there is not much of news around and this is also one of the reasons for the volatility to be so low.

EURUSD in Tight Range

This was what we witnessed yesterday in the markets as the daily range of the pair was less than 50 pips and there was not much for the traders to trade with. Even the day traders would have found the going tough, with such a small range, as they have to consider the spreads as well before they establish any kind of position in the market and it is also highly unlikely for them to catch the top and bottom of the range for them to make much profits.

So, this was much of consolidation and ranging for the day and we have the sinking feeling that such low volatility could be the order of the day in the days and weeks to come as far as this month is concerned. This is generally the summer in Europe and time to go on travel and holidays for the traders and the general public alike and with the traders desks empty and with even Trump out on a holiday, there is not much for the markets to look forward to.

We have had some weakness in the dollar as of this morning though there does not seem to be any fundamental or economic news to trigger such a weakness. The jury is still out on whether this recovery in the dollar is a full fledged change of trend or whether this is a correction of the dollar weakness but only time will tell. Looking ahead to the rest of the day, we do not have any major economic news or event from any part of the world and so we can expect some more consolidation in this pair with a bullish bias and we could also see the EURUSD pair make a move to the range top once again.