EUR/USD Fundamental Analysis – week of September 18, 2017

The EURUSD had a steady week of trading in the week gone by but there are some beginning signs of recovery in the dollar. The focus for the week was clearly on the dollar with a range of data from the US including the PPI, CPI and retail sales to be released and it was clear that unless the dollar showed some strength, it would be difficult for the bears in this pair to have any kind of foothold and we could probably see the pair much higher.

EURUSD Has a Steady Week

But the pieces of data from the US were not too encouraging. The PPI data came in weaker than expected but that did not have much of an effect on the dollar. The dollar was led during the first half of the week by news and reports that said that Trump was trying to reach out to the opposition to get support for pushing some of his plans and Bills through the House. This raised hopes that he would do he best to push through his tax and healthcare reform bills as well and the market loved the news. This pushed the EURUSD pair lower and for a brief while, it looked as though the pair would break through 1.18.

This was then followed by the CPI data from the US which put further pressure on the pair but still the bears in the pair could not break through.On Friday, we had the retail sales data from the US which came in much weaker than expected in all aspects. This clearly placed the dollar on the backfoot and the EURUSD pair was able to recover as a result of that and it closed the week above 1.19 and looking steady.

The upcoming week is likely to be crucial for the dollar as we have the FOMC meeting minutes which will be the cynosure of all eyes. Of course, the Fed cannot hike rates anytime soon but the steadily improving data from the US over the last couple of weeks should give them some room for hawkishness in the short term. This could be reflected in the minutes which would in turn give a boost to the dollar in the coming week.