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EUR/USD Daily Fundamental Forecast – February 22, 2017

By:
Colin First
Updated: Feb 22, 2017, 03:28 UTC

The theme over the past 24 hours has been the general strength in the dollar across the board as the market begins to prepare itself for the FOMC meeting

EUR/USD Daily Fundamental Forecast – February 22, 2017

The theme over the past 24 hours has been the general strength in the dollar across the board as the market begins to prepare itself for the FOMC meeting minutes that are going to be released later on in the day. The EURUSD pair seems to be the most hard hit as a result of these moves and we saw the pair crash through 1.0600 as a result of that but the pair has not yet been able to break through the month lows. The bears in this pair must be picking their lips in anticipation of the dollar strength continuing which is likely to push the pair further down.

FOMC Is Key

The market is awaiting the FOMC minutes which it expects to be hawkish and hence bullish for the dollar. All the Fed members, including Yellen, have been hawkish in their speeches that they have made in the various forums over the last few weeks and this has led the market to forget about Trump and his team and focus on what could be a possible rate hike as early as March. So, anything that is less than hawkishness in the minutes may not be taken kindly by the dollar bears.

EURUSD Hourly
EURUSD Hourly

The dollar has not been able to pull itself together and get a trend going and this has been frustrating for the dollar buyers as the uptrend in the dollar is something that they have been expecting since the beginning of the year and they hope that it would arrive soon which would place a lot of pressure on the EURUSD.

Looking ahead to the rest of the day, apart from the FOMC minutes, we have a Fed member speaking and we also have the existing home sales data from the US which will also be an indicator of how the economy is doing. From the Eurozone, we have the German Ifo Business Climate data. We expect the EURUSD pair to consolidate for a large part of the day with a lot of volatility expected after the release of the minutes.

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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