EUR/USD Daily Fundamental Forecast – March 1, 2018
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The euro continued to fall during the course of the last 24 hours and the fall has since taken the EURUSD pair below the 1.22 region where it continues to trade as of this writing. We believe that this weakness is set in place for now and this should now carry the pair towards the 1.20 region in due course of time.
EURUSD Moves Lower
We had been mentioning all along that the dollar was bound to gain in strength in the medium term due to the prospect of quick rate hikes from the Fed and also mentioned that once the support region around 1.2240 broke through, then we should be looking much lower in this pair. With the new Fed Chief Powell likely to tow a hawkish line over the next few months atleast, as long as he is supported by the incoming data, it is more or less confirmed that the dollar would be gaining in strength over the coming weeks.
As far as the euro is concerned, it too has been supported by some strong data but the strength of the dollar has been too much so far. We might be able to see some balance once the ECB starts to taper the QE but by that time, we should see the euro much lower. Over the coming weekend, we have the Italian vote and also the voting results in Germany for the formation of a coalition and it is likely that the euro would be impacted by how these results go over the weekend.
Looking ahead to the rest of the day, we will see the weakness in the pair continue to haunt the markets. As far as data is concerned, there is not much by way of data from the Eurozone while Powell testifies again in the US and we also have the ISM manufacturing data as well.
This article was originally posted on FX Empire