EUR/USD Daily Fundamental Forecast – July 27, 2017

The EURUSD pair took off on the next leg of its bullish run, something which seemed to be only a matter of time over the last few days when the pair was seen to be correcting. The pair seems to be in a tearing hurry to make full use of the weakness in the dollar and it looks set to break through the 1.18 region during this leg. The reason for the latest round in the bullishness is due to the FOMC meeting minutes, which was the biggest news event of this week.

EURUSD Takes Off on Another Bullish Leg

A lot was expected from the minutes, especially from the dollar bulls who had been pounded into submission across the markets due to the lack of support from the Fed and also from the incoming economic data. They had expected the minutes to be hawkish and give a timeline on when the next rate hike can be expected. Though the minutes still kept the door open for the next rate hike, there was nothing in it that was hawkish for the dollar and this disappointed the market who began to sell off the dollar in earnest.

Though the minutes did touch upon the monetary policy and also the balance sheet issue, it was clear that the Fed was no longer very upbeat about the rate hike and was looking to take it slow, especially with the incoming data being bad. They seemed to be comfortable in the weakness of the dollar and this was a clear signal to the market to continue selling the dollar. This helped the EURUSD pair to recover from the low 1.16s to push through 1.17 and it now trades just below 1.1750 looking good for more.

Looking ahead to the rest of the day, we have the durable goods and unemployment claims data from the US but we are likely to see the continued reaction to the minutes for today as well which would mean that today is likely to be another bullish day for the EURUSD pair.