EUR/USD Fundamental Forecast – February 21, 2017

The EURUSD has been trading weak over the past 24 hours as the markets saw a return of dollar strength a little in anticipation of the FOMC meeting minutes in the middle of the week. Though there was a return of the dollar strength, it still was within limits which has caused the pair to trade through 1.0600 and it trades just above 1.0580 as of this writing and it continues to remain weak.

Yesterday, we had a holiday in the US and hence the movements in the various pairs were pretty much restricted. It was also the beginning of the week and there was no economic news to look forward to as well, all conditions being ideal for a slow and dull market which is exactly what we got from the markets. Today morning, it has been comparatively brisk as the dollar strength spread through the markets but we believe that this is something that is going to exist for the rest of the day as the traders prepare themselves for the FOMC minutes tomorrow. With many of the Fed speakers being bullish on the US economy and some of them also indicating that a rate hike as early as March may not be off the table as yet, the market would expect the minutes to be highly bullish as well. Anything less than that would be considered as a disappointment by the traders.

Looking ahead to today, we have a couple of Fed members scheduled to speak but there are no major economic news to be released from the Eurozone or the US today. So we can expect the EURUSD to consolidate with a bearish bias and the support zone at 1.0580 should come under serious pressure. A break of that could push the pair towards 1.0500. Traders can use these regions to plan their trades accordingly.