The EURUSD pair has begun what is likely to be a tight and light week as far as the markets are concerned. Most of the traders around the world are already off on a holiday on account of Christmas and the New Year and hence they are unlikely to be at the desks. This is going to lead to a market that is low on volatility and liquidity and hence we can safely expect the euro to trade within a tight range during the week.
EURUSD In Tight Range
The economic data is also very light on the calendar and the fundamentals are also not going to be too much during this period. The dollar has been helped to remain steady by the passage of the tax reform bill which has since been passed through the Senate and signed into law by the President of the US. This is likely to give a lot of tax benefits for the corporates and it was an important bill from the point of view of Trump and his team. This is expected to boost hiring in these companies and lead to some strong growth in the coming years.
That is why the dollar has received a short term boost from the passage of the bill and this effect is likely to continue for the rest of the week as well. But the euro has been caught in a tight range and some consolidation over the last few months and the fundamentals on either side have not been enough to help the pair to break through this range. It remains to be seen whether the trend would be strong enough in January to help the pair push through its range.
Looking ahead to the rest of the day, we do not have any major news from the eurozone or the US as it is a holiday in most parts of Europe and hence expect some tight ranging and consolidation for the rest of the day.