EUR/USD Daily Fundamental Forecast – June 27, 2017

EURUSD continues to trade within the range to begin the new week and though this is the final week of the month, we believe that there is likely to be a lot of volatility in the upcoming days as there are a host of Central bank leaders who are scheduled to speak during the course of the week and there is also likely to be a lot of volatility due to month end currency flows. Traders would be well advised to be alert to the various possibilities.

EURUSD Likely to Remain Under Pressure

The EURUSD did make an attempt to push through the 1.12 region and it did manage to move above 1.1210 for a brief while but this move was heavily sold into. This selling was a result of the strengthening of the dollar which came about on the back of durable goods data that showed that the fall, which we have been seeing, has stopped. This gave a boost to the dollar not only due to the fact that the data was good but also on the hope that the incoming data from the US would get better and better in the short term, something that the Fed had hoped for.

The Fed  has made it clear that the rate hikes in the future would be dependent on the incoming data and that the data would improve in the coming months, despite the fact that the latest round of data from the US has been bad. So, it is imperative for the new incoming data to be strong to justify the stand of the Fed and that is why each data point is likely to be watched very closely. The euro has been stable at best and it trades near its support region at around 1.1180 as of this writing but it is likely to come under pressure as the dollar strength increases.

Looking ahead to the rest of the day, we have Draghi and Yellen making speeches during different times of the day and this is likely to bring in some volatility in the markets. We expect the dollar to get strengthened during the short term which should keep the pressure on EURUSD prices.