EUR/USD Forecast – May 11, 2017
The EURUSD pair continues to chop around as it has been doing since the beginning of the week. The market had expected the pair to open very strong for the week and continue to move from strength to strength during the course of the week on the back of the French election results where the market and euro friendly Macron won the elections pretty easily. But on the contrary, we have been seeing the pair on the back foot as the bulls have decided to take some rest and also have decided to take out some profits so that they can buy the pair lower as it corrects.
EURUSD Consolidates in Slow Trading
We have also been seeing the dollar strengthening across the markets as the traders complete their full pricing in of the June rate hike from the Fed and a combination of these factors has led the pair to correct below 1.0900. But over the past 2 days, we have been seeing some consolidation, ranging and choppy trading which we believe is a sign of the market trying to form a base.
We have been mentioning in our forecasts over the past couple of days that we do not see the EURUSD pair going below 1.0800 in this move and that this move is just a correction of the ongoing uptrend which is only an endorsement and a healthy sign of the uptrend and we continue to believe in this view. We expect the pair to form a base here for another leg of the bullish run as the effect of the rate hike begins to wear out and the improving strength of the euro economy begins to shine through.
Looking ahead to the rest of the day, we do not have any major economic news from the eurozone but we have the PPI and unemployment claims data from the US which is likely to have little impact on the prices, if any. We can safely expect the EURUSD pair to continue to chop around 1.0850 for today as well.