EUR/USD Daily Fundamental Forecast – September 11, 2017

The EURUSD pair has been correcting ever since it made the highs for the year near the 1.2090 region but the fact that it could not hold on to this region for long should be a matter of concern for the bulls. The pair had shot higher on the comments from Draghi who said that the QE had to continue as long as it needed to continue and though this could be interpreted as a dovish statement, the market had made up its mind on buying euros and that helped to carry it to the highs.

EURUSD Corrects Lower, Awaits US Data

Now, we do not know whether this correction is going to continue or whether the euro is going to go higher. What we do know is that the line in the sand for the bulls and the bears would be the range highs around the 1.2090 region and only a break through that region would mean that the uptrend has resumed. If the pair does not manage to break through that region, then we always run the risk of the pair moving lower in the short and medium.

The fact remains that the eurozone economy is recovering and that there would be nothing that can reverse that. The fact also remains that tapering is on the way but what matters now is the timeline and the extend of the tapering. There is nothing stopping the ECB to continue its tapering but also continue QE at a smaller range and this is what Draghi seems to have hinted. But even a bit of tapering would be enough to keep the euro buoyant and this is what we are likely to see in the medium term.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US for the day and so we can safely expect some consolidation with a bearish bias as the dollar looks to recover across the board. No news is good news as far as North Korea and the US are concerned and with no news from the Korean region over the weekend, we should see some recovery in the dollar which should keep the EURUSD pair under pressure.