EUR/USD Fundamental Analysis – week of October 16, 2017

After seemingly bottoming out over the previous week, the EURUSD pair made some decent progress over the last week as the pair ended the week over 1.18 and looks solid and steady and primed to make more progress in the coming week. The dollar seems to be a bit lost and though it has not been thrashed all around, it has been slowly dripping lower which must be a matter of serious concern for the dollar bulls.

EURUSD Moves Higher on Weak Dollar

The dollar started the week on the backfoot due to the weak NFP data that was released in the week prior and throughout the entire week, it could not make much progress. The only hope for the dollar bulls was the FOMC meeting minutes which they hoped would be supportive of the dollar. But the Fed member repeated the same usual story about the economy and said that the inflation was also a matter of concern. Any hint of the timeline for the next rate hike from the Fed was nowhere to be found in the minutes and this disappointed the market even further.

The CPI data later in the week, also came in weaker than expected though the retail sales was better. This continued to trend of the incoming data from the US being choppy and this failed to inspire any kind of confidence in the economy and to the prospect of a rate hike in December and the dollar closed the week on the backfoot with the euro bulls smacking their lips for the week ahead.

In the upcoming week, apart from a speech from Draghi and the usual reports like the unemployment gains etc. from the US, there does not appear to be any piece of news or data that can lend support to the dollar. In this scenario, the dollar is left at the mercy of the markets which should continue with their slow and steady selling of the dollar which should help to push the EURUSD pair higher in the coming week.