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EUR/USD Daily Fundamental Forecast – December 06, 2016

By:
Colin First
Published: Dec 6, 2016, 03:16 UTC

It was supposed to be a rout for the EURUSD when the market opened on Monday after the Italian referendum had resulted in a No vote and it did appear,

EUR/USD Daily Fundamental Forecast – December 06, 2016

It was supposed to be a rout for the EURUSD when the market opened on Monday after the Italian referendum had resulted in a No vote and it did appear, during the early part of the day atleast, that it would come true as the pair came under severe pressure during the Asian session and managed to reach as far low as 1.0503 as some of the strong supports threatened to give way and the pair would have then be staring at parity.

EURUSD Hourly
EURUSD Hourly

But just as dollar weakness seemed a done deal when Trump won, the euro weakness was considered a done deal after the weekend. But just as the dollar reversed during the course of the day, we saw the EURUSD reverse during the course of the day as the entire move was reversed and the pair continued to push through and reached as far high as 1.0795. Whether this was a short squeeze or just a continuation of the bounce from the lows, which we had been predicting in our forecasts, remains to be seen. If this move stops at around the 1.0800 and fails to push through, then we could see a continuation of the downtrend which could then threaten the support at 1.05 and if broken, we could even see parity in due course of time.

Looking ahead to today, we do not have any major news from the Euro or the US region and so we expect a continuation of yesterdays moves and we should see atleast one more attempt at yesterdays highs and then, as mentioned above, the reaction there would tell us whether this upmove would continue or not. The ECB meeting is scheduled for later in the week and with the markets expecting Draghi to give a timeline for the QE program to end, we could be in for some volatility between now and then.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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