Daily EUR/USD Forecast – March 06, 2017
The EURUSD pair has been rising since late Friday and so far, it has been able to manage to hold on to its gains and it is to the credit of the euro bulls that it has managed to climb so much though the dollar has not slipped by too much. The pair continues to trade above 1.0600 and looks fairly comfortable above that so far.
EURUSD Rises Surprisingly
In fact, the rise in the EURUSD pair is a kind of a surprise for many of the dollar bulls as the trigger for the rise came from the Yellen speech on Friday. It would have been justifiable if she had sounded bearish and the dollar had weakened across the board but she was in fact, highly hawkish as she more or less confirmed that there would be a rate hike in March and this helped the market to complete a 100% pricing in of the March hike.
But in a classic case of sell-the-fact, the dollar sold off across the board and this helped the EURUSD push through 1.0500 and then on to 1.0600 and it trades above this as of this writing. We had mentioned in our forecast on Friday that the region just below 1.0500 is likely to be a strong support region and depending on how the Yellen speech pans out, there is likely to be a bounce from that region and this is exactly what we saw on Friday.
Looking ahead to today, we do not have any major news from the Eurozone or the US and we expect the EURUSD pair to consolidate and range between the 1.0550 and 1.0650 region for most of the day as the market prepares itself for more important data towards the second half of the week that includes the NFP report which assumes significance as the Fed members, including Yellen, are pretty clear that the hikes would come along only if the data continues to be good.