EUR/USD Fundamental Analysis – week of June 4, 2018The pair started the week on the backfoot but rebounded well later
The EURUSD pair had a tough time during the first half of last week but it was met by some strong buying at the lows which helped it to recover and rebound during the second half of the week which helped it to close the week above the 1.16 region and this holds out some hope for the bulls in the coming month.
EURUSD Recovers Well
The week began with the news of uncertainty and confusion in the Italian political circles and this affected the market as a whole and the euro in particular. The euro had been weak leading up to the start of the week and this news only added to the woes of the euro which fell even lower and headed towards the 1.15 region. We had warned of the same in our forecasts earlier in the week and we had also said the pair was likely to see some buying in the 1.15 region.
This is what transpired during the second half of the week and this helped the pair to rebound as well. The weak data from the US in the form the ADP and GDP also helped the recovery further though the strong NFP data later in the week put a cap on the gains. But even then, the euro had a strong close to the week and this bodes well for the bulls in the coming weeks. We believe that the region around 1.15 should continue to provide some good support for the EURUSD pair.
Looking ahead to the coming week, the focus shifts away from the dollar and to the other currencies and we believe that we will be seeing a week of consolidation. The confusion in Italy also seems to be on the wane and hence we can safely expect the euro to stabilise in the short term. The region around 1.18 should serve as a cap for the upper side of the range while the region around 1.15 should serve as the lower side of the range for now. We do have a speech from Draghi but we doubt whether that would add anything as far as the impact on the euro is concerned.