Yahoo Finance EUR/USD Fundamental Analysis – week of January 22, 2018
In what could be a interpreted as the first signs of weakness in the EURUSD pair in several weeks, the pair failed to break through the 1.23 region during the course of the week and spent much of the time ranging and consolidating under this region. The lack of fundamental drivers could also be attributed to the failure to move higher but this is generally expected in the second half of the month when the economic data from the different parts of the world begin to dry up.
Euro Loses Momentum
There was not much data to be released during the course of last week and this led to some choppy trading in most of the pairs. The dollar remained steady despite fears of an economic shutdown but that has become so commonplace ever since Trump took over that the market did not seem to consider it too worthy to worry about. The ECB members also became wary of a quickly strengthening euro and had to rush in with statements about when and how the gradual shifting of policy would take place.
All these developments led to some choppy trading in the pair which kept the pair between the 1.22 and 1.23 regions for much of the week. Though there were attempts to break through on either side, they were not fruitful and the pair kept failing at the edges of the ranges. The loss of momentum would be a cause of worry for the bulls and they would hope to pick up the momentum back again next week.
Looking ahead to the coming week, we have the ECB rate announcement and press conference. Though they have begun to talk about the gradual shift in policy, which means that they would be looking to stop the QE, by the end of the year, it is expected that they would like to tone down the anticipation and ensure that the euro does not run away higher. So, we do not expect the ECB to be hawkish in the coming week and this could bring in a correction in the euro. We also have the GDP data from the US and if it comes out stronger, it could give the dollar, the much needed strength.
This article was originally posted on FX Empire
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