EUR/USD Fundamental Analysis – week of June 26, 2017

Though a look at the charts would give us a picture of some decent volatility in the EURUSD pair in the week gone by, it has to be said that most of the volatility came towards the end of the week when most of the traders had been lulled into sleep or had just packed their bags and left for the week. For the first major part of the week, we did not have much volatility and the pair stuck to the highs and lows of its range making trading easier and boring at the same time.

EURUSD Likely to be in Range

This was only to be expected as we are into the second half of what has been an eventful month and so it is only natural for the traders to feel the need to take some rest and take some profits off the table. The month end currency flows are likely to begin coming in next week and with the economic events over the last week being very less, there was very little push or pull on the prices and this was one of the main reasons for the lack of volatility.

It is very clear that there is some large scale selling in the 1.13 region and some good buying in the 1.11 region and these two price regions have been defining the price range for the past few weeks. This is expected to continue in the short term as well. Also, last week, during the first half of the week, we saw some dollar strength but it progressively weakened during the course of the week which has helped the EURUSD pair to close just below 1.12 for the week. The investors are yet to fully trust the dollar as there have been no signs of the data from the US getting any better in the short term.

Looking ahead to the coming week, we have speeches from a host of central bank leaders which is likely to bring in some volatility in the markets. We also have the GDP data from the US and are also likely to see some month end positioning and currency flows which are likely to keep the EURUSD pair under consolidation with bullish bias as we believe that none of the above events would be strong enough to push the pair through the high or the low of the established range.