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EUR/USD Daily Fundamental Forecast – May 23, 2017

By:
Colin First
Updated: May 23, 2017, 03:16 UTC

The EURUSD pair continued to trade in a steady manner over the last 24 hours as the dollar remained on the backfoot for most of the day yesterday. There

EUR/USD Daily Fundamental Forecast – May 23, 2017

The EURUSD pair continued to trade in a steady manner over the last 24 hours as the dollar remained on the backfoot for most of the day yesterday. There was some correction during the morning yesterday which had pushed the pair below the 1.12 mark for a few hours but it was very clear even at that time that it was more of profit taking and traders and investors setting themselves up for the next bullish leg rather than any large scale correction.

EURUSD Continues Higher

This move below 1.12 lasted for a few hours but after that, the pair continued to move higher in a steady manner and broke through 1.12 by the time the London session began. As if all the bullishness surrounding the euro was not enough, we had Merkel making a speech where she said that the euro was being too weak and this made the German products much cheaper than they would like. This has been the stand of Germany as far as their monetary policy is concerned, for long, and so this was not much of a surprise from the investor point of view.

EURUSD Hourly
EURUSD Hourly

But, what the investors think, do not matter much nowadays and it is all about what the robots and the general market think. So, this was seen as a signal to increase the strength of the euro and so was followed by a fresh round of euro buying which pushed the EURUSD pair beyond 1.1250 and till 1.1263 where it was met with selling. It continues to trade near the highs of the range for now with 1.13 as the next immediate target.

Looking ahead to the rest of the day, we have the German Ifo Business Climate and the Flash PMI data from Germany and France and we also have a couple of Fed members speaking who would probably say that the June rate hike is off the table. The EURUSD pair is likely to be bullish in this respect and expect a challenge to 1.13 pretty soon.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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