EUR/USD Daily Fundamental Forecast – July 21, 2017

The EURUSD once again rocketed higher as even the ECB President Draghi could not keep the euro down for long. It remains to be seen what needs to happen for the euro to break down but for now, the euro seems to be moving to levels that should begin to concern the ECB. But the US seems to be fine with where the dollar is and there does not seem to be any action coming in from the Fed to control the dollar fall.

EURUSD Moves Higher on ECB Talk and Dollar Weakness

Yesterday we got a healthy mix of euro strength and dollar weakness and that basically reversed the correction in the pair and pushed it much higher than the bulls themselves would have expected. During the early half of the day, the pair was in a small correction mode and dipped below 1.15 for a very brief period before the spate of euro-moving news. The announcement of the rate came and went and the focus was on the Draghi press conference. He did his bit to sound bearish but it was clear that the dynamics of the market and the Euro economy was simply too strong that just talking down the euro wasnt going to help. This became clear as his speech went on and the market took the cue and pushed the EURUSD pair higher.

Also, once the US session began, we had news that Muller, head of a special council, would be investigating some of the business transactions of Trump and this only increased pressure on the dollar. This was enough signal for some more dollar selling to happen and this pushed the EURUSD pair higher through 1.16 where it sits comfortably as of this writing. The region around 1.1640 is likely to have some strong selling but if and when it breaks through, then the next target is likely to be 1.18.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US and so we can safely expect the effects of yesterday to continue today as well. As long as the pair is below 1.1640, we can expect some correction to happen.