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EUR/USD Daily Fundamental Forecast – January 23, 2017

By:
Colin First
Published: Jan 23, 2017, 02:58 UTC

EURUSD has gained over the last couple of days mainly on the back of the weakness in the dollar. The euro seems to have made full use of this weakness and

EUR/USD Daily Fundamental Forecast – January 23, 2017

EURUSD has gained over the last couple of days mainly on the back of the weakness in the dollar. The euro seems to have made full use of this weakness and has now burst through 1.0700 and continues to look good for more. There has been no specific reason for the weakness in the dollar. While some claim it to be general correction in the dollar strength, others believe that the uncertainty surrounding the new administration in the US and their plans is the reason for the weakness. But what is indeed clear is the fact that the dollar is on the backfoot and it would take something strong and quick for the dollar to turn around.

The euro has been quite resilient over the past week or so even at times when the dollar was showing strength. The euro has been bouncing back from its small correction and now has finally broken through 1.0700 clearly and it looks set to test the price region near 1.0840. Some blame the weakness of the dollar on the speech by Trump after assuming Presidency, which they believe was not clear or strong enough and also the fact that he has rolled back some parts of Obamacare. So, there is a general risk surrounding Trump and his team and their actual plans and also on whether they would roll back many other moves of the previous administration. This risk has been weighing on the dollar for the past couple of days and it continues this morning as well.

EURUSD Hourly
EURUSD Hourly

We are entering into the last week of the month where the economic news is generally less but this is a new dawn for the dollar and entry into an unknown phase and this is why we have been seeing a lot of volatility in the dollar and in other currencies over the past couple of weeks. Looking ahead to today, we do not have any major news from any part of the eurozone or the US and hence we can expect the theme of the dollar weakness to continue for the rest of the day.

 

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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