The euro was one of the strongest currencies yesterday as it moved higher during the course of the day against the dollar which was also reasonably strong and steady as well. It was a slow day which was expected from the first day of the week and the euro rose slowly but steadily during the course of the day as it moved through the 1.1650 region and continues to trade comfortably above that as of this morning.
EURUSD Moves Higher Into Resistance
The euro has found some strength after correcting lower on the back of dollar strength which was seen early yesterday morning. After having been strong during the course of last week, especially due to the news that the tax cut plan for corporates in the US was delayed by a week, the euro suffered a setback yesterday morning as it turned weak, rather the dollar turned stronger as hopes of a rate hike in December from the Fed improved.
We had the Fed member Harker making a speech early yesterday where he said that there would be one more rate hike in December and 3 more in 2018 and this hawkish statement helped to add strength to the dollar during the early half of yesterday. But as the London session, began the euro bulls began to take control and helped push the euro higher and now the pair rests at a key resistance region and today could be a key in determining which direction it takes in the short term.
Looking ahead to the rest of the day, we have speeches from Draghi and Yellen scheduled during the London session. We doubt whether they would touch too much upon monetary policy in this speech of theirs but that doesnt stop the market from hoping. The market would be looking for hints of the December rate hike from Yellen as this would help to strengthen the dollar in the short and medium term as well. We also have the PPI data from the US later during the US session and this is also likely to bring in good volatility.