EUR/USD Daily Fundamental Forecast – July 18, 2017
The EURUSD pair has continued on its merry ways as it has broken through the 1.15 region as of this morning and has moved on further. This should have come as a surprise for a lot of traders who would have been expecting some sort of a correction in the pair has it had been unable to make much progress over the last couple of days. But just like gold a few weeks back, the euro seems to be the first instrument that has taken flight on any signs of dollar weakness and this has been the case today morning as well.
EURUSD Continues Higher
The big news as of this morning has been the report that 2 more Republicans are unlikely to support the new healthcare reform bill and with that, it is more or less confirmed that the new reform bill would not go through and that Obamacare would continue to stay on. This is likely to be a huge blow for the Trump team as it places into question, its effectiveness in pushing through various bills. This leads to a lot of uncertainty as well and with Trump promising various tax cuts as well, those could be at risk as well.
This is certainly not good news for the dollar and we are seeing some major unwinding in the long dollar positions. Also, the Fed also does not seem to worry too much about the unwinding of the positions as Yellen had a chance to stall this sell off last week but failed to take it. This might be a part of the strategy to keep the dollar weak on purpose, for the short and medium term. Also, with the Fed close to steadying its rate policy and with other countries beginning to hike rates just about now, there is a clear imbalance and change in market dynamics as of now and this is what is being seen now.
Looking ahead to the rest of the day, we do not have any major news from the Euro or from the US for the day and so we should see some correction when the London session opens before the EURUSD pair continues in its uptrend.
This article was originally posted on FX Empire