The EURUSD pair continued to trade in a strong manner but it should concern the bulls that the pair has not been able to break through the crucial 1.1430 region for the second week running. Again, we saw the pair make a move towards the breaking of this region this week as well but once again, it failed and it fell back. But it did close the week on a strong note which should give some hope for the bulls in the coming week.
EURUSD Yet to Break Range High
It was a week of intense action for both the euro and the dollar as it was the first week of the month and as expected, the news events and the data points were many and this kept the markets and the traders on their toes. The action was quiet during the early half of the week as we saw a recovery in the dollar in anticipation of better data from the US later in the week. The market has a tendency to overrun data and it was the same last week as well. In the second half of the week, we first saw the ECB minutes which showed a clear hint that the ECB was discussing tapering. The minutes said that the members did discuss tapering but decided to postpone further discussion until the inflation data supported such a measure. This was bullish for the euro which helped it to recover back from below 1.13 and move higher.
Then came along the ADP data which was a shocker for the dollar bulls as it missed the expectations. This continued the trend of data missing expectations from the US which brought in a lot of anxiety for the dollar bulls that the trend of bad economic data would continue and lay to waste the expectations of the Fed that the situation would get better. This also led to doubts on when the next rate hike would be and this helped the EURUSD pair to climb even higher through 1.14 and threaten to break through the highs of the range. But the selling pressure increased in this area and the bears were saved when the NFP beat expectations and this helped the dollar to recover some extent and caused the pair to end just below 1.14 for the week.
Looking ahead to the upcoming week, the risk events for the dollar continue with a Yellen speech and retail and PPI data from the US lined up for the week. The key here would continue to be the 1.1430 region and a clean break of this region would open up 1.15 and then 1.16 while as long as the EURUSD pair stays below this, we should see the euro under pressure.
This article was originally posted on FX Empire