EUR/USD Daily Fundamental Forecast – September 8, 2017

As we had mentioned in our forecast yesterday, it was all about the euro and the euro did have the volatility to match the expectations as well. The EURUSD pair had been consolidating since the beginning of the week and it was clear that the market was waiting for the ECB rate statement and the press conference that would be addressed by Draghi so that it could look for cues on the tapering and what the ECB President thinks about the Eurozone economy.

Draghi Drives Euro Higher

Draghi did have his press conference where he expressed his satisfaction and his happiness with the way that the economy was progressing. He also made it clear that there would not be any change in the rates in the foreseeable future. As for tapering, he said that the ECB would decide on the breadth and span of the tapering as and when it matters depending on the data. He also made it clear that there was likely to be some decision on the tapering in the October meeting. Overall, he did make a half hearted attempt at talking down the euro.

But it did not seem to have much of an effect on the market which seemed to have made up its mind to take the euro higher irrespective of what Draghi wanted to say. This pushed the EURUSD pair through the 1.20 region and it reached almost near the highs of its range before correcting back below 1.20 for a brief while. As of this morning, we are seeing the dollar getting weakened across the board and this has pushed the euro back above its highs from yesterday and through 1.2070 as of this writing.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US for the day but we expect the bullish streak in the EURUSD to continue for the short term and this should carry the pair through 1.21 and further towards 1.22 as well.