EUR/USD Daily Fundamental Forecast – November 9, 2017

The EURUSD continues to trade in a very tight consolidation mode as it has been doing since the beginning of the week. This is likely to wear down even the biggest supporters of the euro and it has pushed the positional traders into a corner as they have had nothing much to work with this week. The range for the whole of yesterday was less than 35 pips and if you remove the spread, there is not much to play with, as far as traders are concerned.

EURUSD Gets Itself Into a Coil

This has been the situation ever since the fall following the announcement of the ECB to extend the QE by a year. This led the euro to a large drop, despite the eurozone economy continuing to throw up strong numbers and it has dropped into a support region around 1.1580. Though it has to be agreed that there has not been much market moving news since the ECB announcement, this slow and low reduction in the daily range is something that was not seen even during the holiday period in August.

This shows increasing uncertainty and confusion among traders on what is the right price for the EURUSD pair. On the one hand, they have the extension of the QE and the strength of the eurozone economy to deal with while on the other hand, they have the dollar which has been held steady for the past couple of months. The dollar has been steady due to the incoming data also being steady during this period which still leaves the door open for a rate hike in December. It has also been helped by the new tax reform bill which has been successfully pushed through by Trump and his team which is expected to help the corporates to make more money.

Looking ahead to the rest of the day, we do not have any major news from either the Eurozone or the US and hence we could probably see the consolidation continue today as well. There has not been any fundamental push to the pair from any direction so far and hence the ranging is set to continue.