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EUR/USD Fundamental Analysis – week of July 24, 2017

By:
Colin First
Published: Jul 22, 2017, 16:07 UTC

In a way, it was a typical week for the EURUSD pair. The traders had to get it into their head that the pair is in a clear uptrend. Any other thought

EUR/USD

In a way, it was a typical week for the EURUSD pair. The traders had to get it into their head that the pair is in a clear uptrend. Any other thought would just spoil their participation in the party that the euro bulls have been having over the last few weeks. Last week, we did see some correction during the early part of the week as the bulls took off some profit and waited for lower prices.

EURUSD In a Tearing Hurry

We did see the pair move below the 1.15 region for a brief period but it was not a move that could be trusted. It was also not a move that seemed to be driven for any specific reason and the only reason for the move seemed to be some correction and profit taking. Once this period was over, the market consolidated and waited for the ECB rate announcement and statement followed by the press conference. The rate announcement did not have any impact as the ECB held rates as expected.

EURUSD Daily
EURUSD Daily

In the press conference, it was clear that Draghi was trying to sound dovish and was very conscious of the fact that the euro was running away higher and higher. But with the economic data so much in favor of the euro, there was not much to do and once the market realised the Draghi was trying to talk down the euro on purpose, they showed their love for the euro and bought it even more which pushed the EURUSD pair through 1.15 and then followed the news that some of the business transactions of Trump was being investigated and this led to another round of sell off in the dollar which pushed the pair through 1.16 and it closed the week comfortably above that mark.

In the upcoming week, we are heading towards the end of the month where the economic news and events dry up and hence we do not have much news in the coming week apart from the FOMC statement. But considering how bullish the EURUSD pair has been, we believe that the next target for the pair would be the 1.18 region.

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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