The EURUSD pair enjoyed one of the tight ranges in recent times over the last week as the range for the entire week was less than 100 pips. This came about just a week after there had been a major breakout in the pair due to the actions of the ECB and thus disappointed those who were looking for further volatility in the pair.
EURUSD In Tight Range
The fact that this form of tight ranging came about in a week when there was a host of news from the US and also a week which marked the end of a month and the beginning of the new one showed that the market was still not sure of the direction which it wanted to take as far as this pair was concerned. It could also mean that the traders are positioning themselves for the next big move in this pair. The bunch of news from the second half of the week in the US were generally along expected lines and hence did not move the markets.
The ADP employment report came in stronger for this month but the data for the previous month was revised lower. Trump announced Powell as the next Fed Chair to succeed Yellen and this was again along expected lines and hence priced into the market. Also, we finally had the NFP data released which came in weaker than expected but the data from the previous month was revised higher. As can be seen, all the data was almost on expected lines and did not do anything to change the expectations of the market to any extent and that was the reason for the traders not being able to choose the direction which they wanted to take.
Looking ahead to the coming week, there is not much data from the Eurozone or the US but we have speeches from Draghi and Yellen lined up for the week. The market continues to look for some hints of a rate hike from the Fed in December and though that has been partially priced into the markets, there is yet to be any confirmation from either the Fed or from the incoming data from the US. We expect the consolidation to continue as the market awaits further direction.
This article was originally posted on FX Empire
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