The EURUSD pair has been slow this morning which is expected from the Monday morning of a new week. The first day of the week generally constitutes a lot of consolidation and ranging in the pairs as the traders get back to their desks after the weekend and get themselves ready for the new week. It should be an interesting week ahead as this is the first week of the month which is usually loaded with data from the various countries.
EURUSD Likely to Consolidate
It is the same this week as well as there is a lot of upcoming news in the second half of the week that includes the FOMC and the NFP as well.The dollar would be the focus in the upcoming week as it is the currency that has the most data to be released during the first week of the month and it will be especially so this month as the market would like to see some improvement in the data. The data from the US over the last couple of months has been quite weak, in fact so weak that the market thought that the Fed would not hike rates in June. The Fed did go ahead with the hike and chose to ignore the data so far but it cannot do so if the data continues to be weak this month as well.
With the focus fully turned towards the dollar in the coming week, we should see the euro take a backseat and allow itself to be dominated by the dollar. The Euro is clearly bullish on the back of improving data from the Eurozone and also some strong hints from the ECB on the tapering of the QE. With such data, the ECB ought to be thinking about tapering pretty soon and this is likely to keep the Euro well bid today and in the coming week. The region around 1.0440 is likely to serve as a strong resistance and could hold the price for the short term.
Looking ahead to the rest of the day, we have the ISM Manufacturing PMI data from the US to kick off the week and we expect some consolidation and ranging in the EURUSD pair on either side of 1.04 during the course of the day.
This article was originally posted on FX Empire