EUR/USD Daily Fundamental Forecast – September 12, 2017
The EURUSD continued its correction over the last 24 hours on the back of a recovery in the strength of the dollar over the same period. The dollar had been battered and bruised over the last few weeks and though it is not out of the woods as yet, it should be a positive sign for the dollar bulls to see some strength in the dollar as and when it is possible.
EURUSD Corrects Lower as Dollar Recovers
The reason for the strength in the dollar was double-fold. One was the fact that there were no additional threats from North Korea over the weekend. There were reports last week that said that they could be firing a missile on September 9 to mark their National Day but none of that happened over the weekend. This improved the risk quotient in the markets and this helped the stock markets to rise and remove some of the pressure on the dollar that had built up over the last week or so.
The other reason is the fact that Hurricane Irma is now not expected to cause as much damage as it was expected to. Last week, the situation was bleak as the hurricane was expected to lash Florida and bring about some widespread damage which would in turn affect the US economy as a whole and this put pressure on the dollar. But the hurricane as now been downgraded into a storm and is not expected to cause too much damage and this has been supportive of the dollar.
Looking ahead, we will have to wait and see whether this is a correction in the EURUSD pair which would provide a chance for the bulls to buy or whether this is a full fledged recovery. We have the inflation and retail sales data later in the week from the US and that is likely to give some strong indication of where the US economy is headed. Till then, we are likely to see some bearish consolidation in the pair and once the data flows in, we will then be able to see whether it warrants a recovery of sorts in the dollar.
This article was originally posted on FX Empire
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