EURUSD Struggles to Stage a Recovery

The EURUSD pair is trying to stage a recovery and a rebound but so far, the efforts for a rebound have been nullified by the strength of the dollar. The pair has been trying to rebound off the support region around 1.18 but it has been unable to do so over the past 3 days which points to further weakness.

EURUSD Hovers Around 1.18

The pair is suffering from the double blow of weak data from the Eurozone and strong data from the US. The weak data from the Eurozone has made it difficult for the ECB to think of tapering the QE anytime soon and this is in contrast to their stance over the last few months when the data was strong and when they were looking to taper and end the QE and probably even look to hike rates during the first half of next year. This is not going to happen anytime soon and the break through the long held range has only confirmed the weakness in the euro.

On the other hand, the US economic data has managed to make a recovery of sorts over the last couple of weeks after the fall and the choppiness that we had been seeing in the data over the last few months. This has led to widespread anticipation over the overall strength of the US economy and has led traders to believe that the Fed could be bullish during the months ahead which would only mean that we could be seeing more rate hikes along the way from the US. This is the reason for the dollar bullishness at this time.

Looking ahead to the rest of the day, we do not have any major news from the US or the Eurozone for the day and it would be interesting to see where the pair finishes for the week. If the pair continues to be weak, then we are likely to see further weakness ahead while on the other hand, the bulls would attempt to close the week stronger.