EUR/USD Daily Fundamental Forecast – July 17, 2017

The EURUSD pair is once again threatening the highs of its range as it received a boost on Friday due to the weak data from the US. The dollar has been struggling for the past few weeks to string together any kind of a recovery. The NFP released earlier in the month had raised hopes that the economic data from the US would stage a turn around and we should be on the start of the dollar recovery but that has failed to be.

EURUSD Shoots for the Stars

Last week, we saw the dollar to be steady on decent data but the eyes of the market were on Yellen and the data late on Friday. Yellen largely disappointed and she did not seem to mind the fact that the lack of hawkishness in her speech would place the dollar further on the backfoot. With Yellen not supporting the dollar much, the dollar bulls were left to look at the data on Friday to save them and bring in some interest in the buying of the dollar. That failed to happen as both the retail sales data and the CPI data failed the expectations big time.

The retail sales showed a negative growth while the CPI data came in at 0.1% against the expected value of 0.2% and this deflated whatever gas there was in the dollar engine and this pushed the EURUSD higher once again. We were looking for a deeper correction in the pair but the lack of economic growth in the US should begin to worry the Fed and with them stating that the next rate hike would be dependent on incoming data, the next rate hike just seems that much more farther away.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone and the US and so we should expect that the market reaction from Friday would continue today as well, though on a much smaller scale as the traders prepare themselves for the week ahead.