EUR/USD Daily Fundamental Forecast – Oct 16, 2017

The EURUSD pair has weakened since Friday which is a bit of a surprise considering the fact that the data from the US continues to be choppy and mixed and there does not seem to be any trend as far as the incoming data is concerned. With the lack of trend, it would seem that the dollar is on the backfoot but that has not been reflecting on the pricing of this pair.

EURUSD Moves Lower on Choppy US Data

The dollar was expecting the data on Friday to help it to get into some kind of a trend. The lack of support from the FOMC minutes had made the dollar weak overall but still the dollar bears were not convinced of the downtrend in the dollar and were hoping to see some strong data on Friday so that they could decide once and for all whether the dollar should be bought or sold. The retail sales data and the CPI data were on the pipeline and it was clear that the Fed was looking towards inflation to help it make a decision with regard to the December rate hike.

But the dollar bulls were left disappointed once again as the CPI data came in weaker than expected while the retail sales data came in stronger which once again showed that the US economy was still choppy and this has now made the rate decision even more difficult. There was some initial dollar selling based on the data which carried the pair towards the 1.1870 region but this was then followed by dollar buying whih has since pushed the EURUSD pair back into the low 1.1800s.

As far as today is concerned, as with all Mondays, the market is expected to be slow as the traders position themselves for the rest of the week. It is not a holiday anywhere and so the liquidity and the volatility should be decent for the day. As with most Mondays, there is no major news release for the day.