USD Receives Boost But Uptrend In EUR And GBP Remains Intact
Dear Traders,
We finally saw some reversal in the FX market after consecutive days of strength in both euro and pound. The U.S. dollar received a boost from encouraging comments from U.S. President Trump, who used the ‘strong dollar’ language in order to soften previous comments from U.S. Treasury Secretary Mnuchin who seemed to avoid the strong dollar policy. The sharp reversal happened after euro and pound have surged to new highs.
The euro took out the 1.25-barrier and rose to a high of 1.2537 on the back of the Eurozone’s improving outlook. ECB President Draghi declined to say that the euro was too strong while his comments on growth were relatively bullish. He said that the euro’s strength was in part down to the regions improving outlook. In short, Draghi’s commentary was not enough to trigger a reversal in the euro’s uptrend. Thus, euro traders should generally expect further euro strength, anticipating higher targets in the EUR/USD at 1.2560 and 1.27.
The British pound was able to extend its gains towards 1.4350 before a sharp reversal occurred, sending the cable back below 1.42.
Today, traders will pay attention to the U.S. and U.K. 4Q GDP figures, which could affect the price action in both EUR/USD and GBP/USD. We will watch the release of the U.K. GDP at 9:30 UTC. The U.S. GDP is scheduled for release at 13:30 UTC.
We wish you good trades and a nice weekend.
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