EUR/USD Fundamental Analysis – week of April 2, 2018

It was another week of consolidation and ranging in the EURUSD pair and it was also a shortened week in many parts of the world on account of the holiday. The euro continued to trade within the larger range between the 1.22 and the 1.2450 region but the overall theme of the week was that of dollar strength.

EURUSD Stuck in Range

It has been a tough couple of weeks for the traders and the investors as the week before last saw the dollar weakening all across the board due to the decision of the US administration to impose tariffs on various Chinese goods and this has led to fears of a lot of reactions fro China and other countries and escalation of this trade war. But so far, during the course of the last week, there has been little follow up to the action from the previous week and this has helped to calm down the markets and also helped the dollar to gain in strength all across the board.

This has led to some choppy trading in the pair as the euro moved lower and back to the lows of the range just a week after pushing to the highs of the range. It has led to a lot of up and down movement and a part of that has been down to the fact that the pair has also been rocked by a lot of month end and quarter end flows that we have been seeing in the markets. The traders would be happy to see the end of the month and look forward to the new week and month.

Looking ahead to the coming week, it is going to be a shortened week in many parts of the world and we are also looking at some important data in the form of NFP and the wages report from the US and also a speech from the Fed Chief Powell. The market would hope to see the trend of strong incoming data from the US continue in the coming weeks as well and hence the NFP would be watched closely. We also have to take into consideration the fact that the geopolitical risks and tensions continue to exist in the market and hence are likely to surface and dominate the market headline at any point of time. This is something that the traders should be mindful of.