EUR/USD Daily Fundamental Forecast – July 14, 2017
Though the EURUSD pair seems to be volatile and moving here and there, if we zoom out and view the movements on a daily scale, we will notice that the pair has been trading in a pretty tight range over the last few days. The pair is clearly bullish but after having made the move above 1.1450 a couple of days back, it has since corrected back below that region and it trades just above 1.14 as of this writing.
EURUSD Consolidates
The lack of progress beyond the 1.1450 region, despite some weakness in the dollar over the last couple of days, should be a matter of concern for the bulls. They would have expected the pair to continue to move higher, once it was clear of the strong resistance in the 1.1430 region but so far, no such move has happened and we are, in fact, seeing the pair trading below the broken resistance as of this writing. The more time spent by the euro bulls in planning and executing their move, the more chance that some dollar bullishness might come along and reduce everything to nought.
We have had 2 days of testimony from Yellen but there has not been any signs of hawkishness from her speech. This was again a disappointment yesterday to the dollar bulls as some of them might have expected her to support their dollar and give hints on the strength of the economy and when the next rate hike would be. She stuck to her usual lines without giving any such hint and as a result, the dollar has been on the backfoot.
Looking ahead to the rest of the day, we have the CPI and retail sales data from the US and these are important pieces of data, probably the second most important pieces of data after the employment report and hence will be watched closely to see whether the recovery in the employment data leads to a recovery in these numbers as well. If it happens, then we could see the dollar get a second wind.
This article was originally posted on FX Empire