The EURUSD pair had a volatile week when the price action was choppy and it ended the week on a bullish note. The upcoming week is likely to be very interesting with a host of data, including the NFP, lined up for release during the course of the week. The euro bulls should feel confident of continuing their progress as they managed to finish the week above the crucial support near the 1.2240 region.
EURUSD Choppy
The week began with the dollar on the rise and the euro suffered due to that as it gradually broke through the 1.2240 region and in fact, it went below the 1.22 region for sometime as the pair came under a lot of pressure. We also have the new Fed Chief Powell sounding hawkish in his first ever testimony and Capitol Hill as he toed the line of the other Fed members in saying that he believed that the US economy was on strong footing and that the rate hikes should follow soon. This was bullish for the dollar as this raised the possibility of 4 rate hikes this year and this led the dollar higher.
EURUSD Daily
EURUSD Daily
It was all going good for the dollar bulls till the US administration decided to impose import tariffs for steel and aluminium. This is expected to affect the domestic industry but also increased the changes of a global trade war breaking out with China expected to retaliate in kind in the short term. This led to a reversal in the dollar strength which helped the euro to close higher for the week and looking very bullish as well.
The upcoming week is likely to be very volatile with the bulls and the bears likely to battle it out for control. The pair has managed to close the week above strong support but it remains to be seen whether the bulls will be able to hold that region considering that a slew of data would be released in the coming week including the NFP. The data from the US has been strong over the last few weeks and the dollar bulls would be expected that to continue so that they can try and seize control over the increased possibility of a rate hike in March and further accelerated rate hikes in the coming months. The other risk events include the elections in Italy and Germany which could impact the euro is they do not go according to plan.