EUR/USD Daily Fundamental Forecast – July 13, 2017

It was a busy day for the EURUSD pair yesterday as it moved higher during the early part of the day only to correct lower during the course of the day before settling down to close above 1.14 for the day. It was a whipsaw kind of action as the pair tried to break through the 1.15 region during the London session but that level seemed to be well protected.

EURUSD On Slippery Ground

The failure to break through the region led to a round of correction in the pair. There was nothing hawkish on the dollar side and so it has to be said that this move down was purely euro based and this was enough to cause the pair to push down below 1.14 and head towards the support at 1.1380. All this happened even before Yellen took center stage for the day and the market was looking forward to her speech for hints on monetary policy.

Though she did touch upon monetary policy during the course of her speech, there was nothing in the speech that could be interpreted as hawkish and this served to be a disappointment for the traders who then began to sell of the dollar. This helped the EURUSD pair to bounce off the support from 1.1380 but so far, the bounce has been very shallow and unconvincing and it remains to be seen whether the euro can hold on to its gains and build on it in the upcoming day.

Looking ahead to the rest of the day, the dollar is likely to continue to hold center stage as we have the PPI and unemployment claims data and Yellen continues to testify today as well. This is likely to keep the dollar traders on their toes and we believe that we might see some dollar strength at some point in the day which should keep the EURUSD pair under pressure.