EUR/USD Daily Fundamental Forecast – November 6, 2017

The euro continued to weaken during the course of the day on Friday as the strength of the dollar began to take root despite the not so special data from the US. This would mean that the market is continuing to price in a rate hike from the Fed in December despite the fact that the Fed has not done or said anything to that effect so far.

EURUSD Under Pressure

The euro weakened post the release of the data from the US and continues to trade near the 1.16 region, which is the lows of the range, as of this writing and it looks as though it is likely to weaken during the course of trading today. Last week, the euro had one of the tightest ranges that we have seen in recent times as the EURUSD pair had a range of less than 100 pips for the week. This raises the possibility that there might be a breakout sometime this week which could lead to a larger move and so far, the trend seems to have changed to down and hence the breakout is expected to be downwards.

On Friday, we saw the release of the NFP data from the US and it came out a bit weaker than expected. But this was compensated by the adjustment in the data from the previous month which was revised upwards. This meant that the data was more or less on the expected lines and hence, there was not much reaction from the EURUSD pair immediately after the announcement. It was only much later in the day that the dollar began to gain in strength which pushed the pair lower.

Looking ahead to the rest of the day, we do not have any major economic news from the Eurozone or from the US and hence we can expect some ranging for today as well. The weakness in the euro persists and hence we can expect some bearish trend to the pair for the rest of the day.