EUR/USD Daily Fundamental Forecast – October 20, 2017
The EURUSD pair moved higher during the course of trading yesterday as hopes of a deal being struck at the Brexit talks improved. Though nothing has been finalised as yet and the stalemate at the talks continued, the statements from Merkel and the UK PM May has suggested that some progress is happening and that they are heading towards thrashing out some deal later in the coming months.
EURUSD Likely to Correct
This was positive for the euro as the making of a good deal is not only important for the UK but also for the eurozone as well. The dollar also continued to correct a bit during the early half of the day. The market was looking towards the tax reform bill in the US and the slight delay in that made the market jittery and led to a mild sell off in the dollar during the first half of the day yesterday. But as the US session opened and the stock markets stabilised, after a brief hiccup as traders were reminded of ‘Black Monday’ 30 years ago, the dollar began to strength and it has since grown even stronger over the last couple of hours as the tax reform bill has been finalised.
This now paves the way for reforms to take place and is a great step forward for Trump and his administration. It has also shown that Trump has successfully negotiated through the deal with his own party and the Democrats as well and this opens up the possibility of him getting through other bills as well. This is hugely positive for the dollar and the effect of this is likely to be felt during the course of the day today and we can expect the EURUSD pair to continue to weaken through the course of the day.
Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US for the rest of the day but the passing of the tax reform bill is likely to be welcomed by the dollar bulls and we should see some dollar strength for the day today.
This article was originally posted on FX Empire
