EUR/USD Daily Fundamental Forecast – August 9, 2017

Just when you think that the markets have gone into a deep slumber and that the traders have begun to relax a bit, something shows up to announce their presence. Yesterday, the markets were woken from their slumber by data which, under normal circumstances, would not have caused much of movement. But yesterday, the situation was different and it has to be said that this kind of move was building up over the last few days.

EURUSD Corrects Lower, Looks Weak

The data is called the JOLT employment data and it came in stronger than expected and gave an unexpected boost to the dollar. This led the EURUSD to drop by close to 100 pips as it felt from above 1.18 to the support region around 1.1720. We have been mentioning over the last few days that the support at 1.1720 would be key in the times going forward and if and when that support is broken, we could be looking at a much deeper correction. So far, this region has managed to hold the price but it is likely to keep coming under pressure in the short term.

We also saw an increase in the risk around the world as North Korea continues to threaten attacks and the US continues to threaten to retaliate to North Korea. This has led to the strengthening of the yen and gold which has in turn affected the pricing of other instruments as well. The EURUSD had bounced from the 1.1720 region to move back as high as 1.1780 but today morning, we are seeing the pair back at the lows as the global risks increase. We are seeing the EURUSD under more and more pressure in recent times as investors and traders and probably the Euro leaders are felling the pinch of a strong euro.

Looking ahead to the rest of the day, we do not have any major news from the US or the Eurozone but we expect the volatility from yesterday to dominate the markets today as well which should keep the EURUSD pair under pressure.