EUR/USD rises for the third week in a row
|The euro lost ground against the US dollar on Friday but still manged to end the week higher, with a gain of around 70 pips. EUR/USD peaked on Friday at 1.0781, the strongest level in six weeks and the dropped, finding support at 1.0725. The Trump/Merkel meeting had no impact on the pair.
During the last hours of Friday, it was hovering around 1.0740, headed toward the second highest weekly close of the current year. Still, the weekly chart shows the pair with a bearish bias and under the 1.0800 zone, that is an important technical area.
The rally of EUR/USD during the week was triggered by a decline of the US dollar across the board. The greenback turned sharply to the downside, despite the Federal Reserve rate hike. FOMC projections and Yellen’s press conference pointed toward a more gradual speed in the Fed tightening cycle, that what most market participants were expecting.
Data ahead
Next week, the preliminary reading of the PMI index will be released in the Eurozone and also in the US. In Euroland also wage growth data for the fourth quarter is due: “We expect another soft print just above 1% leaving underlying inflation pressure very subdued”, said analysts from Danske Bank. In the US, also the durable goods orders report and home sales data will be published.
US: Key events for next week - Danske Bank
Also, traders will continue to pay attention to central bank talking. On Wednesday the Fed rose rates and now focus point to what is going to do next. In Europe, some members of the European Central Bank talked about rate hikes, boosting the euro in the market.
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