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EUR/USD Daily Fundamental Forecast – December 07, 2016

By:
Colin First
Published: Dec 7, 2016, 02:58 UTC

The EURUSD chose to spend yesterday consolidating in a tight range as there was no economic news to push the pair in either direction and there was also

EUR/USD

The EURUSD chose to spend yesterday consolidating in a tight range as there was no economic news to push the pair in either direction and there was also no continuation of the move that we had seen the previous day. The fact that the pair continues to trade above 1.0680 should give a lot of hope for the bulls as they would like to push the pair beyond 1.0800 and see what the sellers do at that point. The ECB meeting is scheduled to be held tomorrow and the bulls would want to set themselves up for volatility in the pair that is likely to occur during the announcement and the press conference thereafter.

EURUSD Hourly
EURUSD Hourly

The pair was stuck in a tight range for most of the day as the effect of the Italian referendum over the weekend began to wear off and the market began to focus on the ECB statement and press meet scheduled for Thursday. The market expects the ECB to announce some kind of tapering to the QE program that is currently underway but the way we believe Draghi works, the markets may not get such a straightforward action from the ECB at this time. It is likely that Draghi might choose to mix the bullish tone with something dovish and hence may not talk about the stoppage of QE just yet. Of course, there is no way that the QE program can be stopped just like that and the only possibility is the tapering of the same.

Looking ahead to today, there is no major economic news that will be released from the Euro region or the US region and so we can safely expect the pair to hold to the tight ranges on either side as it rests and waits for what the ECB meeting is going to throw at them. We believe that one more test above 1.0800 is due and we should get that atleast and then we will have to wait for what Thursday brings us.

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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