EUR/USD fell and created a double-bottom. Will this continue? The team at BTMU has an answer for the shorter and longer terms:
Here is their view, courtesy of eFXnews:
EUR/USD – BEARISH BIAS – (1.0600-1.1100)
The risk-off trading that had been anticipated in the wake of a surprise Trump victory in the US presidential elections never materialised and instead investors are focusing on the potential lift to growth and inflation stemming from an aggressive program of tax cuts and infrastructure spending. We may well have further comments from Trump in the week ahead that might give the market some help in determining what Trump’s focus will be.
Other than that we have a number of Fed speakers which will help the markets gauge FOMC thinking ahead of the final meeting of the year on 14th December. In the week ahead we have Kaplan, Lacker and Williams (Monday), Rosengren and Fischer again (Tuesday), Bullard, Kashkari and Harker (Wednesday) all scheduled to speak along with Retail Sales (Tuesday) and CPI (Thursday) data.
The inflation data may get a lot more attention now given the lurch higher in yields and expectations of aggressive fiscal stimulus into an economy just about at full employment. That might keep the EUR/USD rate under downward pressure although we would expect the momentum of recent days to fade slowly.
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