EUR/USD Daily Fundamental Forecast – November 1, 2016

EURUSD continues to range and consolidate within 40-50 pips as the market awaits the new month and the new week in front of us. This is an important week with a range of economic events scheduled to be released from different parts of the world right from today. Though there is no major news from the Euro region for this week, there is a lot of news out of the UK and the US which is likely to affect the euro going forward. We have the FOMC meeting and minutes for November and though the market does not expect anything major so close to the Presidential elections, is is likely that some traders do expect some sort of direction or hint regarding the timing of the rate hike. The market is pricing in a rate hike for December but there are some dissenters to this view among hedge funds and banks and so the market continues to be bogged down by this news and the same is the case with EURUSD as well which is unable to breakout as the news of the rate hike continues to weigh.

This is also a week leading up to the US Presidential elections and again, though the markets expect Hillary to win, the market still does not want to commit itself fully to this idea based on its experience from the Brexit vote. The pair consolidated the whole of yesterday with some time being spent trickling downwards towards 1.0940 and other times being spent trickling upwards towards 1.0980.

Looking ahead to today, we do not have any major news scheduled to be released from the Euro region and so we can expect some more consolidation and ranging for today. The support and resistance has been defined yesterday at 1.0940 and 1.0980 respectively and a break of 1.0980 should open up 1.1130. We expect consolidation today with a bullish bias. Traders would be well served by trading with strict stop losses as markets are expected to be highly volatile this week.

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