EUR/USD Daily Fundamental Forecast – April 04, 2017
EURUSD traded in a steady manner as the market was preparing itself for some bigger battles ahead in the week. We had mentioned as much in our forecast yesterday as we had said that the pair is likely to consolidate for a day or two leading up to the slew of data that is coming in towards the middle and the end of the week. This is what we saw yesterday as the pair was caught within a 40 pip range for the entire day which is less than half of its normal range. It was also the beginning of the new quarter as well and so the traders probably wanted to play it safe.
Euro In Tight Consolidation Mode
We had the ISM Manufacturing PMI data from the US later yesterday but that was generally along expectations and this helped to hold the dollar steady as well. The US yields dropped during the US session and though it impacted the yen pairs and the stocks as well, its impact on the dollar was limited. We have the FOMC minutes and the NFP later in the week and the market is basically in a wait and watch mode to see what the Fed has to say and also to see how the incoming data is as the Fed made it very clear in its March statement that further rate hikes would depend on incoming data.
Looking ahead to the rest of the day, we have the ECB President Draghi making a speech during the US session but he is well known not to touch upon monetary policy in his speeches and speak about them only in forums that are specifically on policy. So, we can expect the same from him today as well which would mean that the EURUSD pair is likely to consolidate for the rest of the day between 1.06 and 1.07 waiting for some news to push it in any specific direction.