The EURUSD pair has been moving lower as the strength of the dollar is beginning to show through, over the last day or so. The focus will be clearly on the dollar in the upcoming week, not only for the range of data that will be released from the US but also for the developments in the political space as well.
EURUSD Under Pressure
We are seeing the tax reforms bill moving through the Senate and this is generally very positive for the dollar and as long as the progress is smooth, then we can expect the dollar to continue to grow stronger based on these developments. This is what we have been seeing since Friday as well. On the other hand, the developments surrounding the issue over Flynn continues to add pressure to the dollar as it is likely to be dollar negative.
These couple of developments are likely to dominate the headlines as far as the dollar is concerned and would continue to be the focus through the week. We believe that the dollar would continue to hold steady during the short term as we head into the end of the year. We are also going to see the markets look forward to the rate hike from the Fed during this month and though this has already been priced into the markets, it could lead to a very short burst of dollar strength and all these factors should keep the dollar well bid.
Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US but for the reasons stated above, we expect the dollar to stay strong during the day. This should keep the euro under pressure and lead to some consolidation and ranging as well on either side of 1.19 during the day.
This article was originally posted on FX Empire