EUR/USD Daily Fundamental Forecast – June 28, 2017

The EURUSD pair ripped higher on hawkish comments from Draghi and also a combination of events in the US which has caused the dollar to fall across the board during the course of the last 24 hours. The pair has risen by over 160 pips over the last 24 hours and finally, all the bullishness that had been brewing underneath over the last several weeks has come to the surface and shown itself for all to see.

EURUSD Rips Higher

It was the usual first half of the day as the pair spent its time consolidating just below the 1.12 region. Then came along the speech from Draghi who is known not to touch upon monetary policy on most of his speeches. But when he does, it is usually market moving and yesterday was one of those days. The ECB is known to be bearish but the strong incoming data over the last few months has forced the normally bearish ECB to change their stance. Yesterday, Draghi gave his best hint as yet of a change in track and said that there is a good chance of the ECB beginning the tapering of QE anytime quite soon.

This was very hawkish for the euro and the simmering strength helped it to push the pair higher towards 1.1250 and beyond. There was a brief halt just before the 1.13 region which had been acting like a wall over the last few months and it looked as though the pair might stop there and reverse from there once again. But, reports began to come in that the healthcare reform bill in the US was delayed once again as the Republicans themselves could not agree on a lot of points. This weakened the dollar across the board as the fears of policy paralysis in the US reared its head again and this helped to push the pair across 1.13 and beyond and it trades comfortably above that as of this writing.

We  had mentioned that unless the other final week of every month, this week is going to witness a lot of volatility and we have been proved right. Looking ahead to the rest of the day, we have Draghi speaking once again today and it remains to be seen whether he is going to touch upon monetary policy again and if he does, it might be some sort of a record for him on having touched upon the subject twice in a row. If he does not say anything adverse to contradict what he said yesterday, we should see the EURUSD pair continue to move higher now that it is free of the 1.13 resistance.