EUR/USD Daily Fundamental Forecast – September 28, 2017

The EURUSD pair continued to move lower during the course of the day yesterday as the rebound in the dollar began to assume large proportions. The rebound started as a trickle and except for those who are very aware of what is going on in the markets, no one seemed to have picked up the start of the rebound and only when it has turned into a flood, the traders begin to notice it. But in this case, we had pointed out to the rebound when it started as the signs were clear.

EURUSD Continues to Suffer

We had mentioned about the possibility of a dollar rebound when the EURUSD pair could not get past the 1.2070 region with any conviction. The price did come to these levels a couple of times atleast but it failed to break through everytime. We also pointed out to the change in the incoming data as the most important pieces of data like CPI showed an improvement over the previous months and we had mentioned then that all that the dollar needed to start a full fledged rebound was for some support from the Fed and we had advised caution for the traders.

The much needed support from the Fed came in the FOMC announcement where they made it clear that they would be looking to hike rates one more time in December if the incoming data was good. This was the signal that the dollar bulls needed and they have been on the rampage ever since. Now the euro is at a crucial support and we expect some kind of a bounce in the euro and some weakening in the dollar in the short term which should carry it back above 1.18.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone but we have the Final GDP data from the US which should be watched closely by the traders and which could lead to some volatility. A strong data reading could continue the dollar rebound which should then carry the EURUSD pair below 1.17.