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EUR/USD Daily Fundamental Forecast – September 22, 2017

By:
Colin First
Published: Sep 22, 2017, 03:04 UTC

The EURUSD was mixed during the course of the day yesterday as it chopped around not knowing exactly how to deal with the recovery in the dollar. It was

EURUSD Friday

The EURUSD was mixed during the course of the day yesterday as it chopped around not knowing exactly how to deal with the recovery in the dollar. It was the day after the FOMC, the meeting in which the Fed decided to keep the door open for a rate hike in December and also decided to undertake balance sheet reduction.

EURUSD Looking Choppy But Strong

This combination of announcements helped to keep the bid under the dollar but the moves in the EURUSD pair were choppy at best. After weakening and moving below 1.19 during the course of the first half of the day, the euro began to recover and move higher as the dollar became weak against certain currencies, once again and this helped the euro to move higher through the 1.19 region and it now trades in the 1.2950 region as of this writing and continues to look strong. It looks as though the pair might even retrace its entire loss in the short term as the dollar bulls continue to find it difficult to bring in a recovery in its strength.

EURUSD Hourly
EURUSD Hourly

The dollar has been unable to string together a few days of bullish gains and the resilience of the euro, as the talk of tapering of the QE continues in the markets, is clear for everyone to see. We expect the euro to remain bid in the short term and we might also see the pair challenge the highs of its range at 1.2070 in the short term. We believe that it is not yet the time for the dollar and hence the bulls have to wait for the Fed to send in strong signals for a hike and for the ECB to reduce the talk of tapering before we can see the tide turn.

Looking ahead to the rest of the day, we have the ECB President Draghi making a speech during the London session but apart from that, there are no major economic news in the day. Draghi would be expected to touch upon monetary policy and the market might even look for some guidance on tapering but knowing his penchant for not discussing monetary policy in meetings where he does not have to, we doubt whether it will have too much of an effect on the EURUSD pair.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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