The EURUSD pair had weakened a bit towards the close of the week on Friday as there was some profit taking in the pair as we approached the weekend. This helped to push down the pair towards 1.0700 but the fact that the pair managed to close above 1.0700 for the week would have been encouraging news for the bulls. That bit of encouragement has been enough for the bulls to push the pair higher this morning as EURUSD now trades above 1.0750 as of this writing. The events over the weekend at the G20 could have had some effect on the pair and its rise today.
Euro Likely to Consolidate
Over the weekend, we had the G20 meeting where Trump basically managed to bulldoze his agenda through. His main policy since his election campaign began was to bring the jobs back to US and for this, the path that he chose was protectionism, protecting the industries and the rights of American businesses across the world. His policies were about restricting the free trade that happen around the world and those that the US was part of and ensure that preference is given to domestic industries.
This same policy change was seen in the G20 statement as well as it did not mention anything against protectionism and also did not make any reference to promotion of free trade. This was seen as a major victory for Trump but if the dollar is weakening across the board due to this, then it does not make much sense, to be honest. The markets do not seem to realise how serious this policy could become, in the years to come, and how much it is likely to affect global trade in the long run. If and when it realises that, we could be in for a bear run in many currencies.
Looking ahead to today, we believe that the range top in the EURUSD pair should be 1.0800 and we believe that the pair is likely to trade between 1.05 and 1.08 in the short and medium term. We do not have any major news from the Eurozone or the US for today and hence expect some more consolidation with a bullish bias with 1.0800 capping the upmove.