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EUR/USD Daily Fundamental Forecast – December 1, 2016

By:
Colin First
Published: Dec 1, 2016, 02:47 UTC

EURUSD generally had a bearish day yesterday as it was all about oil for most of the day and the fact that a deal was finally agreed to during the meeting

EUR/USD Daily Fundamental Forecast – December 1, 2016

EURUSD generally had a bearish day yesterday as it was all about oil for most of the day and the fact that a deal was finally agreed to during the meeting led to a general risk on sentiment which helped to cheer the markets and add strength to the dollar. This bout of dollar strength made the pair to crash through 1.0600 and test the strong support at 1.0550 once again but again, the attack was repelled and there has been a decent bounce from that area and the pair sits just below 1.0600 as we write this. There were also reports that said that the ECB might announce the extension of its QE program during its December meeting and this did not go down well with the markets and this contributed to the weakness in this pair.

EURUSD Hourly
EURUSD Hourly

The pair is bound to be under pressure for the next couple of days as well as the USD strength continues to spread across the markets. We have entered a new month as of today, a month in which the Fed is expected to hike rates and though this expectation has already been priced into the markets, we should see this continue to keep the USD buoyant against all the other currencies atleast until the end of the meeting. On the other hand, we have seen some banks reversing their calls for euro weakness in the short term and this could lend some support to the euro. What this would mean is that we could see some consolidation and ranging in the pair over the coming days.

Looking ahead to today, we do not have much news from the euro region for the day and we have the unemployment claims data from the US that will be released later in the day. But with the NFP data coming in tomorrow, this data is unlikely to cause much volatility in the markets. What we could see today is more of ranging and consolidation as the market positions itself for the new month.

 

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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