EUR/USD Daily Fundamental Forecast – October 4, 2017

The EURUSD pair had a choppy day yesterday as the pair moved down during the initial part of the day but moved up towards the end of the day and completed the day with a bullish tone. It is clear that the pair is waiting for news that is scheduled for this week and the market does not want to commit itself in either direction before they know what is going to come out in the data.

EURUSD Awaits Data

The dollar has been on the charge for the past week or so and now it has hit a sort of roadblock as the market seems to be getting a bit ahead of itself. The charge began when the Fed made it clear that they still have the rate hike in December on their minds and they would go ahead with it as long as the incoming data is good. This led to a sort of a bull run in the dollar but now that the data is near, the market is baulking.

The incoming data over the coming weeks is going to be very important for the dollar in the short term. It is key for the rate hike and for now, the market just assumes that the data is only going to get better in the medium term. The data so far has been pretty choppy with some data being good and some not so good and with the most important monthly data ready for release over the next few days, the market has decided to wait and see and that is why we are seeing this consolidation in the EURUSD pair.

Looking ahead to the rest of the day, the business end of the week begins today with the ADP employment data and the Non-manufacturing PMI data scheduled to be released during the US session. We also have Draghi making a speech during that time and this guarantees a lot of volatility in the markets beginning today. We still favor a bounce in the EURUSD pair before the dollar rebounds towards the end of the month.