EUR/USD Daily Fundamental Forecast – February 20, 2017

The EURUSD pair has opened on a steady note as of this morning with no major changes from the close on Friday. The euro has been steady for the past week or so but it has neither been bullish nor bearish. Though the euro has recovered almost all its losses from the slide early last week, its continued inability to break through 1.0700 should be a matter of concern for the bulls. Try as they might, they have been unable to break through this resistance for the past 2 weeks and the longer that the pair spends its time below this, the greater is the risk of it beginning to fall.

We expect the euro to continue to consolidate and range for most of the day but the data from the Eurozone in recent times has generally been quiet soft. For long, the ECB has been trying to keep the Euro weak in the hope that it will boost the respective economies but this policy is beginning to affect them rather than help them and this was stated as such by the German Chancellor Merkel over the weekend when she said that the euro needed to strengthen. Going ahead, this view might be useful for the EURUSD bulls in pushing through higher but with the FOMC meeting minutes to be released during the middle of the week and with the Fed expected to be hawkish in line with their recent comments, we could see the pair weakening further.

Looking ahead to the rest of the day, we do not have any major economic news from the Eurozone and it is a holiday in the US today and so we can expect more consolidation and ranging for the rest of the day and we could see the EURUSD pair locked between 1.0580 and 1.0700 for the day.