EUR/USD Daily Fundamental Forecast – September 1, 2017

The EURUSD pair had a choppy day of trading yesterday ahead of the important NFP report that is scheduled to be released today. The day was marked by the weakness in the pair which pushed the pair below the 1.19 region but the pair has since managed to recover towards the end of the day and it trades just above the 1.19 region, as of this writing, as it awaits the data.

EURUSD Turns Choppy

Not only yesterday, the whole of this week has been pretty choppy for the pair as the dollar strength has also been waxing and waning during the course of the week. It was not much about the euro and it has all been about the dollar so far. It is clear that the ECB is straining under the pressure of a strong euro but Draghi has made sure that none of his speeches would even have such a mention. On the other hand, it is clear that the dollar is weak but the Fed has been quite content about it.

The Fed has left it to the economic data to help the dollar and so far this week, the dollar has been well supported by the incoming data and this has helped the pair to correct by over 200 pips over the last couple of days. Today is likely to be crucial as well as we have the employment data in the form of NFP. The chances of a rate hike by the Fed this year is quite low, as per market expectations, and a bad data in the NFP could mean the end of such hopes and this could be even worse for the dollar.

Along with the NFP, we are also going to see the wages data as well and considering the fundamentals so far as well as the price action, we expect the NFP and the wages data to come in weak which could lead to another round of selling in the dollar and push the EURUSD pair back towards 1.20.