Last week saw further downside for the US Dollar on the back of poor data and dovish comments out of Davos from top US government officials. This led the way for other majors to benefit from the US Dollar weakness. Cryptocurrencies also had a muted performance with Bitcoin trading in a tight range.
Here are the supply & demand levels for this week
The EUR/USD continued its advance against the US Dollar, ending the week at 1.2442.Most of the gains came in the latter half of the week after top US government officials voiced their opinions on favoring a weaker dollar. News that showed a slowing of the US economy in the 4th quarter of 2017 also contributed to the continued dollar weakness.
Treasury Secretary Steven Mnuchin opined that US trade balances in the short term would be boosted by having a weaker greenback. This pushed the Euro to three-year highs against the US Dollar on Thursday. However, the Euro pulled back slightly after President of the European Central Bank Mario Draghi warned against uncertainties occasioned by an unduly strong Euro. Draghi also hinted at a strategy review by the ECB if the comments of the Treasury Secretary and attendant dollar weakness changed the monetary conditions around the EURUSD.
Heading into the new week, perhaps the greatest news focus for traders would the FOMC meeting and rate statement, as well as the Non-farm Payrolls, report on Friday, February 2. After falling for the 7th week in a row, the US Dollar would be looking for some lift from these reports. Also watch out for the ISM manufacturing data on Thursday, February 1st and the ADP Employment Change to be released a day earlier. Monday and Tuesday will likely see quiet market activity on the EURUSD as traders await the direction of the news trades as from Wednesday, January 31.
EUR/USD Daily Supply & Demand zones:
EUR/USD 4H Supply & Demand zones:
EUR/USD 1H Supply & Demand zones: