Daily EUR/USD Fundamental & Technical Forecast
The dollar was generally softer all across the board for the most part of last 24 hours as the fundamentals and politics began to dominate the moves in the currency markets and in that race, the dollar became the ultimate loser. Though the dollar was weak, the EURUSD could not capitalise much on it as there seems to be a lot of selling in the 1.0600 region at this point and the pair could not break through that.
EURUSD Consolidates Below Resistance
The market does seem to be a bit disappointed with the way that the Fed is going about with its rate hikes. The Yellen speech last week had raised a lot of hope for a rate hike as early as March which would have also more or less confirmed three rate hikes for this year. But the Fed minutes released a couple of days back and the lack of conviction in the speeches of the Fed members of late has brought in a lot of uncertainty as far as the rate hikes are concerned and this is affecting the dollar.
Looking ahead to today, there is no major news from the Eurozone or the US for the rest of the day and it looks as though we could be in for some more consolidation with a bullish bias in the EURUSD. This could mean another attempt at the resistance region at 1.0600 and it remains to be seen whether it is successful today.
The EUR/USD pair broke higher during the day on Thursday, clearing the top of the hammer from the Wednesday session. I believe that the market is going to continue to try to bounce as the 1.05 level below offers quite a bit of support. However, I think the 50-day exponential moving average, pictured in red, should continue to be dynamic resistance. Alternately, if we break down below the 1.05 level, the market should continue to break down to the 1.0350 handle. Ultimately, a lot of people are trying to punish the EUR for the possibility of election volatility.