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Euro rebounding in a quiet Monday trade

Monday, Feb 12 2018
Euro rebounding in a quiet Monday trade

There were no data releases from Eurozone today. The EURUSD bearish run seems to be showing signs of tiredness as the pair seems to have found some support in the mid 1.22s region over the last couple of days. This happened last Friday as well as the lack of fundamentals and economic data in both the Eurozone and the US seems to have hit the pair and this led to some consolidation and ranging. But this consolidation has been happening within a tight range which means that the pair is trying to find a base over the last couple of days. This is happening in a region which is known to be a support region and that is why we believe that the pair is forming a base and preparing itself for a bounce in the coming days.

 

The dollar continues to be inherently strong and we do not think that the downtrend has changed and reversed for the good but this bounce might only be a correction of the downtrend. The move lower so far has been quite slow over the last week or so but it has been steady. This has happened due to the inherent strength in the dollar which has been throwing up some strong data in the last few weeks and this has increased the anticipation of further rate hikes from the Fed in the coming months. Already, the market has been pricing in 3 rate hikes for the year but as the incoming data gets better, the market has begun to expect more than 3 rate hikes and this has led to the strength in the dollar.

Last modified on Tuesday, 13 February 2018
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