EUR/USD Daily Fundamental Forecast – July 28, 2017

The EURUSD pair finally had some decent correction during the course of the day yesterday as the pair crashed from its highs close to 1.1780 and fell by around 120 pips and it now trades comfortably below 1.17 and we have to wait and see where it goes from here. This is probably the single biggest correction in the pair over the last 3 weeks and these are probably early indications that the hold of the bulls on this pair might be slipping.

EURUSD Corrects Lower

The trigger for this correction came due to the strong data from the US where the durable goods data came in stronger than expected and the unemployment claims data came in as per expectations. This strong data helped to turn around the trend of late, where the dollar was hit by weak incoming data. It also helped to improve the expectations for the GBP with many of the investment firms increasing the expectations by upto 0.5%. This helped the dollar immensely and with the bulls in the pair already sitting on a lot of profits, it needed only a small trigger to push them to sell.

The pair went as low as the support region at around the 1.1620 region from where it has recovered during this morning and it now trades just below 1.17. The Republicans are also trying to get through a watered down version of the healthcare reform bill and if they manage to do that, it might be even more supportive for the dollar. As long as the EURUSD pair sits above the 1.1620 region, the bulls continue to remain in control but if we get below that, then we could see a good battle between the bulls and the bears for control.

Looking ahead to the rest of the day, we have the advance GDP data from the US which is likely to bring in some volatility in the markets, especially in view of the volatility that we saw yesterday. A strong reading could see the pair move back towards the 1.1620 region where a battle for control is likely to ensue.