EUR/USD Fundamental Forecast – March 3, 2016

Analysis and Recommendations:

The EUR/USD finished lower at 1.0856 on Wednesday. The close was 1.0856, putting the Forex pair down 0.0010, or -0.09%. Euro traders appear to be taking a breather after three days of heavy selling pressure drove the Forex pair into its lowest level since February 1 on Tuesday.

Oversold technical conditions may be contributing to the sideways-to-higher trade, but some light position-squaring ahead of next week’s European Central Bank meeting may be the primary reason for the lack of selling pressure. Additionally, investors may also be taking to the sidelines ahead of today’s U.S. ADP Nonfarm Employment Change report.

The ADP jobs report could move the EUR/USD today in a big way. Traders are looking for the report to show the private sector of the economy added 195K new jobs.

A number stronger than 195K is likely to trigger a resumption of the selling. A weaker number should lead to more short-covering. A bullish jobs number will likely push Treasury yields higher. This will make the U.S. Dollar a more desirable asset.

A weaker number will cast doubt that the economy is strong enough to warrant a rate hike by the Fed. The EUR/USD will likely rally on this news, however, gains should be limited because of expectations of additional stimulus by the ECB on March 10.

In other news, Spain’s jobless rate rose by 0.05 percent in February from the previous month, with 4.15 million people still unemployed.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

 

Upcoming Economic Events that you should be monitoring:

 

Thursday, March 3, 2016