EUR/USD Daily Fundamental Forecast – October 13, 2017

It was a day of consolidation in the EURUSD pair yesterday as it moved up and down during the course of the day with no specific direction. We had mentioned that the region around 1.1880 was likely to provide a lot of resistance and whether the pair is able to break through this region or not would determine the short term direction for this pair.

EURUSD Consolidates Ahead of US CPI

On cue, we saw the prices move to that region and face a lot of selling which has since led to a small correction. But this is a kind of middling and choppy trading that we are seeing in this pair now and traders, who are still out of the market, would do well to stay on the sidelines. The data from the US, in the form of PPI, did not do much in changing the direction of this pair and we are continuing to see some slow and steady action in the EURUSD pair.

The dollar is clearly on the backfoot with the NF coming in weaker last week and the FOMC minutes also not being as hawkish as was expected by the markets. So, all signs are for the uptrend in the EURUSD pair to continue for the short and medium term as the question of whether the Fed would hike rates in December continues to haunt the markets.

It is likely to be an important day today that would answer this question as we have the CPI data from the US that is scheduled to be released later in the day today. This is the piece of data that seems to worry many of the Fed members the most and hence the dollar bulls would dearly wish for a strong reading today to keep alive their hopes of a rate hike in December. The CPI data is scheduled to be released later in the day along with the retail sales data as well and these pieces of data would then determine the short term trend in this pair.