EUR/USD Daily Fundamental Forecast – November 24, 2017

The EURUSD pair continued to trade in a strong and steady manner as the traders took full advantage of the long weekend in the US to push the euro higher. The euro is now in a region of high resistance where it had failed to break through several times before and it remains to be seen whether there will be a break through this region today.

Euro Continues Higher

The impetus for the move up came from the FOMC minutes which turned out to be more dovish than what the market was expecting. While the minutes did more or less confirm the rate hike in December, it was the rate hikes in 2018 that was of more concern for the dollar bulls as the hike in December was almost fully priced into the markets already. But this is where the Fed disappointed as the minutes said that some Fed members were not yet sure of the rate hikes in 2018.

The Fed members also were worried about the inflation data from the US and to be on the safer side, they included their usual tone of waiting for the incoming data to decide on the next hike, in their minutes. Also with the current Fed Chief Yellen moving out in the early part of 2018 and being replaced by Powell, the market would want to see what Powell has up his sleeve before it decides to back the dollar again and all these factors are weighing on the dollar and putting it under a lot of pressure over the last few days.

It is a very light economic calendar for the day, which is surprising for the last day of a week. It is a long weekend in the US and hence we can expect some low liquidity and volatility in the markets. It remains to be seen whether the euro bulls would use this lack of liquidity to push the euro to new highs.