EUR/USD Daily Fundamental Forecast – March 27, 2017

The EURUSD is well up since the beginning of the day today. We had warned of a similar move up in our forecasts for this week and the bulls seem to be well and truly in control of the pair and the move upwards now seems set to be able to break through 1.0850 and if that break happens cleanly, then we should be looking at 1.10 in the short term. The dollar has weakened across the board and that has made the job of the bulls much easier to push the pair up towards 1.0850 and it trades just below that, as of this writing.

Euro Bulls in Control

There are a few reasons being attributed to the weakness of the dollar and one of the main ones, something that we had pointed out in our forecasts, is the fact that the Trump team could not push through the healthcare bill. What made it worse is the fact that he could not get enough support from his own party and the bill could not even get to a vote. This is seen as a large setback to Trump as it raises the possibility that several of his controversial policy changes could be blocked making it impossible for him to bring through any wholesale policy changes in his 4 years in office.

Other reasons being given are the fact that the German leader Merkel has managed to win in a regional election and that bodes well for her continuation in office when the elections take place later in the year. This has helped to strengthen the euro as she is one of the most important supporters of the euro as a concept.

Looking ahead to today, we have the German Ifo Business Climate data which should continue the range of good economic data from Germany that we have always been seeing and this should be euro supportive as well. If that is the case, then we should see the EURUSD pair move towards 1.0900.