EUR/USD Daily Fundamental Forecast – October 27, 2017

The EURUSD pair fell hard yesterday and continues its fall this morning as the ECB pulled the rug from under the euro by not giving what the market was expecting and instead choosing to tread the safer path. For those in the know, it would not have been much of a surprise as the ECB seldom delivers what the market expects. The market was expecting the announcement of QE tapering a a quick timeline for the tapering to being and complete.

EURUSD Crashes Lower as ECB Disappoints

But the ECB did announce a cut in the QE but instead said that the QE would continue till September 2018 and beyond as well. The market was expecting a uch shorter timeline for the tapering to complete and this extension in the QE was something that was not expected. This disappointed the bulls who had been buying the euro in anticipation of a move higher based on the QE tapering and they began to sell of the euro.

This led the EURUSD pair from its highs above the 1.18 range to below 1.17 and it now trades just above the 1.16 region as of this writing. In this crash, the price has broken through several important price regions including the lows of its range which would mean that more pain is in store for the euro bulls. This is quite natural as most of the move over the last couple of months had been happened in anticipation of the QE tapering and with that out of the window, it is only natural for that move to reverse.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone but we have the advance GDP data from the US later in the day. The euro bulls would hope for a weak GDP so that they get some kind of a relief rally in the euro prices which would enable them to get out of their longs at better prices. The bears would hope to cause more pain to the euro if and when the US GDP comes out stronger.