EUR/USD Daily Fundamental Forecast – February 24, 2017

The dollar was generally softer all across the board for the most part of last 24 hours as the fundamentals and politics began to dominate the moves in the currency markets and in that race, the dollar became the ultimate loser. Though the dollar was weak, the EURUSD could not capitalise much on it as there seems to be a lot of selling in the 1.0600 region at this point and the pair could not break through that.

EURUSD Consolidates Below Resistance

The market does seem to be a bit disappointed with the way that the Fed is going about with its rate hikes. The Yellen speech last week had raised a lot of hope for a rate hike as early as March which would have also more or less confirmed three rate hikes for this year. But the Fed minutes released a couple of days back and the lack of conviction in the speeches of the Fed members of late has brought in a lot of uncertainty as far as the rate hikes are concerned and this is affecting the dollar.

Then there is the usual political jousting through the currency manipulation as the various countries try to keep their currencies weak in order to boost their economy and a combination of all these factors seem to be affecting the EURUSD. Though the banks and analysts are quite confident of the return of the dollar strength in due course of time, the challenge seems to be in timing this return to strength and so far, the signs of this have not been good or have been confusing.

Looking ahead to today, there is no major news from the Eurozone or the US for the rest of the day and it looks as though we could be in for some more consolidation with a bullish bias in the EURUSD. This could mean another attempt at the resistance region at 1.0600 and it remains to be seen whether it is successful today.