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Old 21-05-2018, 07:38
AndreaFM AndreaFM is offline
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Default Re: Daily Market Analysis by ForexMart

EUR/USD Fundamental Analysis: May 21, 2018

The single European currency had a quite unfortunate week due to its own fundamentals. The predicted break of the EUR/USD pair under the 1.20 mark indicates the possible weakness to be nearly accurate. In the previous week, the euro/dollar pair had lowered down by 200 pips which are fairly huge considering that market players employ a tight 200 pip range in the past few weeks prior to that.

The tight range lasted for a long period of time and showed that the breakout would be massive. The upcoming data from the European region remains to be sluggish, which implies that there is a little bit of possibility for the QE tapering to happen in the next few weeks and led this speculation to a sell-off in the euro this week.

Also, the dollar resumed gaining strength in general combined with the weakening of the European currency that pushed the pair towards the 1.20 zone and beneath the 1.18 level amid the trading course of the week. As the currency pair closed the week under the region of 1.18, it indicates further weakness in the near term.

Ultimately, this week would have a slight pause for the euro and the focus for next week is the FOMC minutes of meeting which is widely anticipated to continue its hawkishness, pointing to further rate increases in the future. The market had already priced for two more rate hikes while the markets are expecting that the Fed will announce the raise at the end of the year. Aside from that, the inflation report hearings from the EU is expected but none of these data are in favor of the single currency. Hence, the euro would likely resume its sluggishness at the 1.15 mark.
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